After taking support from 76.4% retracement level of an uptrend since Jul 2010 to February last year, Rum Jungle Resources Limited has formed a rounding bottom reversal pattern.
The pattern is quite strong as it is spread over last seven months. It can be seen from the chart that it has broken above the neckline of the pattern and this break out is supported by a good increase in volume. RSI 14 is in the bullish zone and showing a seven month long positive divergence. 50 day EMA has given a bullish crossover to 200 day EMA, indicating an upward movement is due. Rounded bottom reversal pattern gives us a target of $0.50 in next few months of trading, provided the up ward run continues and broader market supports.
Please remember this is not a recommendation to buy, sell or hold Rum Jungle Resources Ltd. (RUM.ASX). It is merely a factual technical analysis write up in my point of view. Please do your own research or consult your financial adviser before considering any investment in any stock.
RUM Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
