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Kenmare Resources

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@StormChaser reviewing the daily, I see divergence on Stochastic, divergence on RSI. Could 218 be the top for now with a possible small correction down to 209 the next move I wonder. 

Kenmare Resources PLC (LSE)_20190805_20.08.png

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Forgetting about indicators which just take away from the chart, H1 shipments for KMR are reported to be off due to weather, not production or demand.  That could impact negatively on H1 financials due in August.  So, fundamentals support a minor pull back but the next time it approaches overhead resistance, likely to melt like butter.

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That is an interesting point. Isn’t it weird though that if I forget the news and concentrate on the market price and indicators, a minor pull back is the same suspected result.

Edited by Nelsy-Boy
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Not really.

RSI and SS/FS indicators are lagging.  They tell what occurred in the past but do not predict what will happen in the future.

For example, if RSI is strong in an uptrend it doesn't suggest that the uptrend will peter out, nor continue.  Nevertheless, all uptrends peter out, and the RSI will retreat.  That doesn't make an RSI predictive.  I've never once on an forum seen someone present statistically significant evidence of a back test proving RSI (or SS/FS) is predictive.  I'm pretty sure if someone did the analysis computationally it would result in a ~ 50/50 result.

Consolidation doesn't suggest a pullback.  Neither does the fact that a historical support or resistance line rests at a point above or below the current SP, mean the price will gravitate towards it.  Patterns are all in the eye of the beholder.  The one thing on the chart that doesn't tell lies is the price, and the volume if you have real volume on the chart.

What an S/R line may betray is the price at which people may be willing to buy and sell.  That is not set in stone because it is impacted by fundamentals.  Fundamentals can be improving or deteriorating so the the prices at which people are willing to deal will alter accordingly.

You also need to consider that for a company like KMR the spread can be up to 10p at times.  There's only a whim between 215/220 and 209/214.

Edited by StormChaser

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