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By The Closet Chartist | Monday 20 January 2014
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.
Frontera Resources (FRR) is a something of a blast from the past. It was a hero for punters this time last year when the stock rocketed from around 0.4p to as high as towards 1.4p in the space of only five months.
The catalyst for the extended rally was as it so often is, an unfilled gap to the upside through the 200 day moving average. However, as can be seen from the daily chart, since the best levels were achieved at the beginning of June we have more or less seen Frontera Resources slip into consolidation mode.
But at least it can be said that over the past 6 months and more the consolidation has been a positive one, a point witnessed by the way that post June support above 0.6p has come in well above pre June peaks which were largely well below this level.
It is usually the case that when we see a decent difference between former resistance and new support it is only a matter of time before an extended fresh leg to the upside materialises.
This could very well be the case for Frontera Resources as we are seeing an initial rebound off the floor of a rising trend channel from February last year at 0.75p.
The implication is that while there is no end of week close back below the 2013 uptrend line the upside here should be as great as the former 2013 resistance zone at 1.2p plus on a 1-2 month timeframe.
This is especially the case as the 200 day moving average currently at 0.83p is still rising and hence dragging the share price higher.
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