As a trader it's always a pleasure to find a set of indicators which, acting in concert, point to the wisdom of taking a position in one stock or another.
Such is the case with Shaw River when a Bollinger squeeze around the middle of last month brought the company once again to my notice. I've been watching it ever since. Since that time, while the SP has moved up, then down a little and now up again, I've reminded myself of this company's worth - a manganese specialist with operations in Australia, Ghana and Namibia, a 'big brother' investor in the form of Atlas Iron (the best big brother any junior explorer could have with its 45% stake in the company) and SRR's own extremely capable board and management team.
Over the past few trading days the OBV increased and, over the weekend, I drew a resistance line on my Pro-Trader chart covering the tops going back to the 20th of January last year. And, on Friday, the SP closed at 17.5 cents with 60 buyers and 29 sellers remaining on the list - a 2:1 buy/sell ratio (another first-rate indicator).
The buy/sell ratio started to become even more attractive this morning so I bought in earlier today. The SP will close above the line. In any TA trader's language, that's a break ... and it becomes its own signal for further buying, particularly with the relatively high volume of shares traded today.
As Dr Alexander Elder writes in his book, 'Trading for a Living', "The goal of a successful trader is to make the best trades. .. Focus on finding good entry points and avoid gambles. Then the money will follow almost as an afterthought" (Elder, p264).
