catherine davey

For interest...I hold GRV

East Coast Minerals NL (ECM)
By Catherine Davey, 18 Jul 2006



It recently rallied from around 10c to 30c. Was this just a flash in the pan or has East Coast Minerals got legs?

Analysis

ECM has big mover potential. It has been around since 1990 and made some thrilling gains in early 1998, going from 20c to $1.337. However recent price action has been less thrilling. From 2003 until the recent breakout, ECM was marking time. The good thing was that the congestion pattern was just above all-time lows dating back to the early 1990s. That gave the recent lows more chance of evolving into a launching pad for a recovery. Also, long term sideways action at the lows is the perfect price action for a recovery and a fulfilment of its big mover potential. The first stage of that process was confirmed when ECM closed above 14.5c in May. However like its resource counterparts, ECM fell victim to the large correction that swept world markets at that time.

Outlook

ECM has the possibility of trading beneath the breakout point of the basing pattern which is at 15c. If that happens it will give investors (albeit speculative ones) a chance to get bullish again if it manages to then close above this level again - ie a second break of 15c. That should be the last time ECM trades at such lows. First upside target at 30c, but this one could go higher by multiples.

Support:- 0.15; 0.10; 0.039

Resistance:- 0.30; 0.34; 0.54; 0.69