cap chart feb 17 - reversal patterns abound

Haven't done one of these in a while and I think CAP's chart deserves a bit of an inspection. The out and out fundamentalists might choose to look away from this thread if charts aren't your cup of tea.

Thus far this year, all we can accredit the strong rise in share price to is a short term recovery effort that is on the backend of a rugged downtrend during all of last year. That's all we can call it thus far - nothing more than a little recovery. Plenty of short term rallies like the one we are in with CAP at present have fallen on their feet with other stocks.

What we really want to see on the chart is evidence that this 2 month movement in the right direction is the start of something that is stronger and can last even longer. Touchwood - I can happily say that at this present time there more signs pointing towards this being the case, rather than opposing it.

We have a very strong reversal pattern completing its final stages and would ultimately need a break of 48c for confirmation. If we get that signal over the next month or so then it really is smiles all round. However (and I have noted this on the chart) the hardest yards in this recovery are still ahead of us, and we will need strong buying volume and momentum on our side to break the key levels of 38c and 48c.

Remember, a break of 48c is the key!