Originally posted by seagull
GLN Daily
Positives
Chart is bullish
StOCH 5 is above the sig line & rising
Stoch 14 is above its sig line & rising
Histogram is rising and above zero
MACD is above its sig line & rising
Close at the top end of the days range
Rising volume at the break.
There is a 61% chance that there will be a higher high on the next bar than the last close on the last bar.
Negatives
Stoch 5 is in the overbought area (above 80)
Stoch 14 is in the overbought area
MACD is very wide away from its sig line
Histogram is very steep
There are 4 unfilled gaps below the current close.
Fridays High reached & closed below a projected trend resistance line.
Weekly chart is bullish
Positives
Stoch 5 above the sig line & in the bullish zone above 50
Stoch 14 above its sig line
MACD rising & above the sig line
Histogram rising & above zero
Close at the high
Volume remained steady & similar to the prev week
There is a 72% chance that there will be a higher high than last weeks close.
Negatives.
Last weeks high closed at a projected trend resistance (after going above)
The high is just below the next projected trend resistance (56 – 57)
Stoch 14 has crossed above the overbought line
Stoch 5 is at the overbought line & is very wide from the sig line.
Outlook
There is no doubt that GLN is undergoing a re rate based on fundamentals and there may be a bit more left in this rise yet.
However all the signs are pointing to an overbought situation & therefore a reversal and consolidation should be expected.
That might not be want people want to hear but the current sharp rise is unsustainable.
Imo there will be a retracement soon, maybe on the next bar and the inevitable retracement to bring the sp back to the more realistic long term trend angle as projected (whichever one of those it settles on)
At this stage I would be expecting somewhere in the 40 - 46 zone initially.
It is obvious that this rerate is in response to the recent company announcements & the many informed posts by regulars who understand the fundamentals and have done the numbers and is probably justified.
What we all know though is the despite the best fundaments and the best drill results etc and despite the best intentions and determination by long term shareholders who want to see the sp keep rising and never retreat, that is not how the market works.
The reality is that small cap spec stocks are driven by traders and speculators who will do their very best to keep the sp going while they take profit & draw in new entrants, a lot of who should know better than to be buying amidst the euphoria & excitement.
Every spec stock goes through this process and follows the recurring patterns.
GLN is no different in that respect and it will have a period of retracement and consolidation.
I believe that that time is approaching.
GLN has a long way to go before it produces and sells anything.
More than enough time for the professional traders & ramper’s (maybe one and the same) to ply their trade in both directions.
An investment in a small cap is dangerous and costly if you enter at the wrong time with little or no understanding of how the game works or how easily it is to be led in the spec end of the market.
The present time is imo the wrong time.
The right time will be soon and after it has had its “normal” retracement.
There are three unfilled “outside” and one unfilled “inside” gaps from the last 13 periods.
That retracement will statistically see most if not all of those gaps closing.
These are my personal views based on what I see on the charts are not advice.
Good luck to all holders.
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How can this be overbought? Average volume was only 300k in the last 12 trading days which saw the 54% SP rise from 35c to 54c? This is not a trading stock unless the trade is content with $20 profit a day. There’s not any big volumes stacking the buy and sell sides. This appears to be a solid re-rate that’s just begun when the seagulls were away.
(20min delay)
