in the price action to the upside. The 7.75p upside is seen as being achieved as soon as the next 1 to 2 months. NETSCIENTIFIC (NSCI): CLASSIC SETUP FOR A 250P TECHNICAL TARGET A couple of years back I wrote the jazzily entitled book “The 49 Golden Rules Of How To Make Money From Technical Analysis. If nothing else it can be said that this was a comprehensive piece of work. But it can actually be said that since then I would probably revise this particular tome to just a handful of rules, with the best of them actually those which combine the different charting or technical triggers. Indeed, four of them combine on the current daily chart configuration of Netscientific. Here it can be seen how over the past couple of months we been treated to a vertical spike through the 200 day moving average, a test of the 200 day
line now at 149p, then a V shaped bull flag. Finally this is likely to be followed by the run-up to a golden cross buy signal between the 50 day and 200 day moving averages. One sees this series time and again in the best of charting situations, with this year’s star minnow Amur Minerals (AMC) and last year’s big winner, Concha (CHA) both sporting the sequence. What helps the situation here at Netscientific is the way the bull flag towards 170p had its support coming in at former January resistance around almost exactly the same level. This example of old resistance coming in as new support is a key aspect in technical analysis and the lack of overlap between the former highs end new lows is only generally seen in the strongest of charting situations. The other fact to note is the
way that the V shaped bull flag we have seen since the end of May seems to be a mid move consolidation of the spike through the 200 day line, with the second part of the move likely to be seen over the next month. This would be expected to be of similar magnitude to the initial break to the upside. All of this would suggest that we should expect Netscientific to hit as high as the top of a rising 2014 price channel at 250p over the nearterm, with only a weekly close back below the 20 day moving average car with 177p likely to even begin to delay the upside scenario. In the meantime, any weakness towards this moving average can be regarded as a buying opportunity, if only to cool off the currently overbought RSI oscillator at 70. PETROPAVLOVSK (POG): 200 DAY LINE CLEARANCE SHOULD LEAD TO 10P It is clear that any recommendations ventured in Petropavlovsk after the extended bear run that we have seen here would have to be regarded with caution given the way that this company has ruefully punished those long of the shares over the past couple of years. However from a technical perspective the break back above the 200 day moving average currently at 6.34p since the middle of June is clearly a significant positive event. This is because traditionally above the 200 day line for a stock or market is regarded as being in back bull mode, even if this is only a temporary affair. However, it can be seen that so far the push through the 200 day line, the first since April 2014 has been a clean one end and it is evident the line has not been required to be tested as new support. While this state of affairs may prove to be a little too good to be true, the message at the moment is that provided there is no break back below the 20o day line, one would be looking to further significant percentage gains. This could mean that the shares hit the top of a rising trend channel from December as high as 10p over the next 1 to 2 months. Ideally ahead of such a move there will be no break back below the former February resistance at 6.76p. Of course, there is the issue of how commodities prices are going to perform over the
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UK Investor Magazine — 5 — July 2015