It is difficult to describe the current charting setup at Lonmin, without gushing. Even before the latest flip higher on the right side of an inverted Head & Shoulders formation in place since March, there was plenty to cheer.
For instance, it was clear going into this week that the stock had found support again at 80p and above, with the May to July price action below 80p an extended bear trap.
But given that this is a relatively strange pattern, perhaps the best way to go in terms of what may happen next is to suggest that at least while above 80p on an end of day close basis, we should be treated to a journey back up to the top of the March broadening triangle formation drawn, with its resistance line projection pointing as high as 135p. This is regarded as a decent 2-3 months or less target. Only back below the present position of the 50 day moving average at 74p would spell danger for the recovery argument, with the expectation we shall not go anywhere near 80p ahead of a sharp rally.
Original article appears on Wall St Wires by Zak Mir.
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