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By Zak Mir | Sunday 17 January 2016
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.
Today at the request of my small handful of readers I look at shares in Dechra Pharma (DPH), Frontera Resources (FRR) and Premaitha Health (NIPT) setting share price targets for all three stocks.
Get your free copy of the 2016 Edition of Zak Mir's classic "The 49 Golden Rules of Technical Analysis for making money from shares" republished just now, HERE
Dechra Pharma (DPH): Above 50 Day Line Targets 1,150p
Considering the way that 2016 to date has managed to serve up one of the worst starts to a stockmarket year, one would, of course, wish to be cautious and only look to the more robust of situations. In the case of Dechra Pharma we are soothed both by the overall rising trend channel which can be drawn from as long ago as January, as well as the late December golden cross buy signal between the 50 day and 200 day moving averages.
While there has been a limited pullback from the peaks achieved last month, the overall uptrend remains firmly in place, a point underlined by the way it is possible to draw a rising trend channel on the daily chart from as long ago as this time last year. The floor of the channel currently runs at 970p and this can be regarded as the zone to go long of the stock for cautious traders. However, if the bulls are luck there will be no sustained weakness back below the 50 day moving average at 1,009p, before we head back to the 2015 price channel top currently implying a 1,150p target.
Frontera Resources (FRR): 200 Day Line Technical Trigger
I have tended to shy away from the daily chart of Frontera Resources in the recent past, largely on the basis that it appeared that the shares had gone into an extended consolidation in the wake of the early 2015 flurry to 1.2p, and that since then there has been a rather messy and difficult to read pattern on the daily timeframe. All of this has so far been contained within a converging triangle which has been in place from as long ago as February.
The width of the triangle is currently between 0.6p – 0.75p, something which at least in theory provides a trading range for keen traders to go for. However, given the length of the consolidation, and the difficultly in terms of the price action, it may be best for longs to wait on a momentum buy signal such as a weekly close above the 200 day line at 0.75p, before taking the plunge on the upside. Above 0.75p would point to an initial target of post May resistance at 0.96p. Clearly, what would not be welcome here as far as the longs are concerned is any break below the triangle floor at 0.6p any time soon, especially after such an extended consolidation.
Premaitha Health (NIPT): 2014 Support Line At 15p
Fans of Premaitha Health will have been delighted by the latest positive newsflow for the company this week. The only real surprise is the way that at least so far we have not exactly been treated to any big rally for the shares. That said, it does look as though the stock is starting to improve technically, a point which Is underlined by the way that so far for January we have been treated to much higher support above October’s floor, and above the 15p level.
This is very encouraging, especially as it ties in with the level of an uptrend line from as long ago as August 2014. The implication of all of this is that we have an entry point towards 15p, with the stop loss on such an idea back below the October support at 11.27p. This would then be expected to take the shares back up to the main post July resistance zone at 22p. However, it has to be admitted that the technical fireworks here would only really be back on track with a clearance of an April 2015 resistance line / 200 day moving average at 20.77p – a momentum buy trigger.
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