money morning: giralia resources hits support

"Money Morning" had the following in their Report this morning.
Giralia Resources Hits Support
By Gabriel Andre

Giralia Resources NL (ASX:GIR) is an exploration company with projects in Australia, Indonesia and USA. The company is mainly focused on exploration for precious and base metals.

Like many of the resources and metals-related stocks of the materials sector of the ASX, GIR has been hammered in the past quarter. It lost two-thirds of its value between early July and end of September.

The reason is that the financial crisis that may lead to a global economic crisis threatens investors. They expect a slower demand from emerging countries and this weighs strongly on base metals prices, and therefore on base metals explorers and producers.

Of course a further decline is possible in the coming months. Especially if more bad news convinces investors that the economic slowdown is worse than expected.

However there are currently opportunities for a technical rebound in obviously oversold stocks. This is the case here with GIR.
(It had a Chart here but I could not paste it in. If you want the report with the Chart, I can email it to anyone that is interested)

It hit a long-term support line two days ago, on September 30 (point D on the chart). This support has been valid for more than one year now. It is built by the higher lows posted since August 2007 (points A, B and C). It's a strong basis for the upcoming price development, as the negative momentum has lost most of its power. A consequence of this bearish trend completion is that the technical oscillators left their "oversold" area.

The Relative Strength Index (RSI) and the Money Flow Index (MFI) have indeed bottomed and have already started to curve upward. By crossing above their respective signal line, they have just triggered bullish alerts yesterday.

A retracement of the 66% decline occurred between June and September (points E and D) is therefore expected. The first intermediary resistance line might be the 23.6% Fibonacci ratio, but the main target for a rebound after such a fall is likely to be directly the 38.2% ratio, around $1.65. Yesterday the price closed at $0.99.

On the downside, a break below $0.80 would be a new bearish signal.

Regards MINYIP.