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By Zak Mir | Monday 15 June 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
If you want me to analyse a stock for you just drop me a line at [email protected] - Today I look at Alkane Energy (ALK), Flybe (FLYB), Imagination Technologies (IMG).
Alkane Energy (ALK): Recovery Towards 38p As Best Case Scenario
Looking at the daily chart of Alkane Energy since the beginning of last year, it is difficult to believe that this stock was once actually a stock market darling of sorts. Looking back to 2012 and 2013 it can be seen that there really was quite a powerful bull run in place. While this now appears to be a distant memory, there are just the first signs that the shares are starting to get back into gear for the bulls. This is said on the basis of the late April recovery of the 50 day moving average now 22p, and the way that this feature is now rising.
The other plus point is that it is now possible to draw a rising trend channel from as long ago as December, with the floor of the channel running level with the present position of the 50 day line. The implication is that at least while there is no end of day close back below the 50 day line we would be looking for an initial target of the 200 day moving average at 28p. This could happen as soon as the next 2 to 4 weeks. However the big prize here is a target as high as 38p at the top of last year’s price channel, which could be achieved over the next 2 to 3 months if the shares manage to deliver higher lows or make no new sustained probe below the 50 day moving average.
Flybe (FLYB): Intermediate Rally In Prospect
It is clear from the November to January price action trajectory of Flybe shares that this was a stock which was happy to hammer the bulls in the wake of an unfilled gap to the downside in November, one which is a classic sell setup signal. Not surprisingly it took a long time for the dust to settle between January and June, with the shares occupying a range between 55p and 65p. Ironically, the normal thing to do in the wake of such an event would be to avoid a stock or market which exhibits such negative price action. However, it can be seen that towards the end of last week there was a decent recovery both of the RSI 50 level and the 50 day moving average now at 57p.
The key point to note here is the way that for Thursday and Friday the price action was wholly above the 50 day line. The implication is that at least while there is no end of day close back below the 50 day moving average we could look for an intermediate rally back towards the top of a rising trend channel from January. The favourite destination at this point would be for a meeting with the top of the 2015 price channel at 70p plus over the next two to four weeks, even if the overall breakdown here resumes after that.
Imagination Technologies (IMG): Golden Cross Run Up Suggests 280p
What is interesting to note about the daily chart of Imagination Technologies in the recent past of the way that we were treated to a 50 day/20 day moving average golden cross buy signal in January which delivered limited upside before the shares gapped down back below the 50 day line in March. Since then the bulls have had to regroup, but at least all the while the 200 day line now at 213p has been rising. This suggests we are in the run-up to a fresh golden cross buy signal with the 50 day moving average of 209p, something which could kicking over the next couple of weeks.
The overall implication of this positive looking configuration is that at least while there is no end of day close back below the 200 day line we would expect Imagination Technologies to make fresh attempts at the upside. The favoured destination for the shares is as high as the top of a rising trend channel from November at 280p, a target which could be achieved as soon as the next 1 to 2 months. Only cautious traders would wait on a break back above the 20 day moving average of 228p before taking the plunge on the upside even though the latest double bounce for the RSI above neutral 50 does suggest that we have a leading indicator buy signal on this situation.
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