But today I thought I'd follow up yesterday's chart of Lynas Corporation, the Rare Earth Miner for tonight's example. Lynas (-2.05%) came in only a little better than Goodman Fielder and Cochlear.
Although in absolute terms, Lynas was a big loser today, relative to recent moves in Lynas, today's move was small. And it came on big volume. That suggests something of a battle going on between the bulls and the bears. The bulls may have been buying up today. If the bears are becoming exhausted, the stock could see some good upward movement.
Lynas is close to some good horizontal supports. Today it finished at 1.91. The low eight days ago was 1.865. That's only 4.5 cents away. Today's move down was four cents.
The next major support level lies at 1.765.
That area 1.765-1.865 might provide good support for a while.
Some sideways consolidation at this stage would seem likely. Maybe another day or two down and then sideways.
The Indicators still show there's plenty of room for downward movement. All four Indicators on the chart are headed down with plenty of space below.
Today's action broke the oblique uptrend line from mid-December to the down-side. Not a good sign.
But that low of eight days ago needs to be broken for much more downside to eventuate in the short term.
I still expect Lynas in the medium term to test the congestion area around 1.50 (with a low at 1.465). That may be some time away. However, that's just a worst case guess-timate on my part. I could easily be wrong.
What's the bullish scenario? A break above the oblique down trend line from 4January (with good volume) would revive Lynas's chances. That would need to be confirmed by a break above the stepped Super Trend Line on the price chart.
I favour the bearish scenario. But - the bulls could come back. Watch that down sloping oblique trend line for a revival of the bullish case.
Good luck
Red
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