Zak’s Weekend Charts Round-Up

FTSE 350 Stocks

Glencore (GLEN): Initial Ceiling towards 200p

Shares of Glencore have lost some of the momentum of their great 2016 rally, with the question now being whether this is due to the market saying that enough is enough for the rise from under 70p. Also worth keeping in mind is the way that Gold and precious metals have been treading water and this has taken some of the fizz out of mining stocks. For instance, it is crucial that over the next week Gold breaks its July resistance at $1,350. From a charting perspective it can be seen how the stock has moved into a rising March wedge which is in theory a bearish setup. Of course, this would only be activated on a break of the support line of the formation which currently stands at 182p, also the intraday low of August to date. The implication is that the bulls have a little wiggle from present levels down to the floor of the wedge, but that an end of day close back below it in the wake of the forthcoming update could be the big sell signal on a technical basis. In the meantime, for those looking for a fresh buy signal, a clearance of 200p and the resistance line of the wedge makes sense.

Hikma Pharma (HIK): Risk of Fresh Breakdown

The daily chart of Hikma is one where there is a clean charting lead. This comes in the form of a large unfilled gap to the downside at the beginning of the month. Since then there has been a cautious base build, but it has to be graded as disappointing considering the way that the rebound has not been able to stretch above the floor of the gap at 2,414p, almost level with the 50 day moving average at 2,416p. The big new sell signal here would be an end of day close back below the floor of a rising trend channel from March at 2,265p. This would unleash at initial downside at the 200 day moving average at 2,167p. But a weekly close below the 200 day line does risk a retest of the 2016 support zone below 1,800p for the autumn.

Persimmon (PSN): Rising Wedge Continuation

The housing market was always the main polite topic of dinner party conversation, but since Brexit one would imagine that this conversation has turned into a frenzy of speculation. Interestingly enough, even though we have delayed Brexit or perhaps even a total fudge, housing shares remain on the back foot. For the charting perspective we have a bearish rising wedge in place with the floor of the wedge just above the 50 day moving average at 1,658p. This is the line in the sand technically, with the risk being that an end of day close below this could deliver a retest of the sub 1,200p lows of the year to date. The downside risk is not high, but is appreciable.

Small Caps

Alba Mineral Resources (ALBA): Bull Flag Could Lead to 0.47p

It may be the case as far as Alba is concerned that it is second time lucky in terms of the chance of this company seeing a sustained share price recovery. This is because in April we did see a decent attempt at breaking higher, with a credible looking consolidation after a gap through the 50 day moving average, then towards 0.37p. However, rather unusually, this ended in failure with a new leg to the downside. The difference between that time and the present bull attempt is that the 50 day line has been cleared even on intraday price action, which suggests that while there is no end of day close back below the 50 day line / March rising trend channel at 0.19p we are on our way to a top of channel target as high as 0.47p. The time frame on the upside scenario is regarded as being as soon as the end of September.

Connemara Mining (CON): 3.5p Price Channel Target

It was interesting to speak with the CEO of Connemarra Mining a few weeks ago, as much regarding tourism as it was about the main activities of the company. Apparently the region is overrun with tourists and they can’t handle any more. As far as the charting position is concerned it can be seen how there has been a rebound off both the 200 day moving average at 1.84p and the floor of a rising trend channel from April at 1.84p. This leads us to assume that while there is no end of day close back below the 200 day line we should be treated to a decent new leg to the recovery here. The favoured destination is the top of the 2016 price channel with its resistance line projection heading as high as 3.5p. The time frame on such a move could be as soon as the next 1-2 months.

Polo Resources (POL):  10p plus Price Channel Top

It is ironic that the only real negative for the bull argument at Polo Resources is the fact that the shares have already rocketed from the lows of the past year under 2p. Now triple that price, it required a rather steely constitution to go long, but the charting position suggests this is the way forward. This is because the stock is in a rising trend channel in place since July last year, with an implied 10p plus target over the next two months. The floor of the channel is level with the 50 day moving average at 5.48p, above which Polo should continue to progress. In the meantime any dips towards the 50 day line to improve the risk / reward ratio of going long are regarded as buying opportunities, from 6p and below.