Roy Martens' Comments on the Technical Analysis Charts of Metanor Resources
Here we are looking at a weekly chart on a closing price base to filter out all the “noise” of intraweek movements.
The chart shows that the stock finds itself in a big descending channel that brought down the price from over $1,- to the 0.55 level on a weekly closing base. Currently, the price is at the lower end of its channel and a new rise to the top end could be next as the conditions for a rise are improving.
RSI is showing positive divergence with the lows in the price and seems to be moving towards the 50 level. Prior breaks of the 50 level signalled a steep rise in the share price, so a break would be welcome.
MFI (money flow) is at bottom level, meaning the outflow of money is possibly ending right here. The chart shows that the MFI seems to be curling up, which means money should start flowing back in.
Looking at the DMI, we see that the selling power (red) is still above the buying power (green,) indicating that the picture is still bearish. But the ADX is at a level below 20 which means either there isn’t really a trend or the bearish trend is coming to an end. A break of the green with the red line (see magenta circles) has proven to be a good buy signal in the past, so patience is due.
Like the MFI, the MACD is near the level where prior bottoms were made. Also, this time it looks like the same pattern is in progress, and we will get confirmation once the MACD breaks its trigger line (see magenta circles).
Now that we established the expectation that a turn in the down trend is near, we’ll have to look at the daily chart to look for more confirmation and clues.
We find more fuel for our expectation that a bounce in the price is near by looking at this daily chart.
The price is knocking on the resistance level at the .60 and even pierced it intraday last week. The bottoming process seems to be coming to an end as the 14 d. MA is moving towards the 50 d. MA. A break will trigger a long(er) term buy signal (see magenta circle 1).
The RSI is supporting a possible breakout with a rising trend for the last two months, but it will have to break above the 50 level (and stay there) to establish a solid buy signal.
The daily MFI is showing that the money flow back into the stock is gradually rising, and higher lows are being made.
In the DMI, the buying power is on the verge of a positive break above the selling power, and this also signals that a change in the down trend is very near.
The MACD is showing big positive divergence and is trending higher since its bottom was made in June. A break above the 0 level will signal the start of a positive trend in the share price.
Conclusion:
Although the down trend isn’t definitely over with yet, there are plenty of indicators telling us that a change of direction is very near. A break above the Cdn$0.60/share level would act as a helpful first confirmation, as this would most likely lead to a rise to the top end of the blue channel in the weekly chart at around Cdn$0.83/share.
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