Perhaps it is fair to say that although we might have expected to see a period of consolidation / retracement for shares of Savannah Resources in the wake of the massive rally in November from under 3p to nearly 14p in March, the length of the cooling off and its magnitude were painful to say the least. A feature of the price action in recent weeks has been the support points made on the daily chart towards 4p since early May. As is so often the case in charting, support and resistance levels in the near term tend to echo old ones from the past. In this case post May support ties in with former October / November resistance at 4p. Another factor to take on board is the presence of an extended and quadruple tested RSI uptrend line, with the line in question currently running through the 34 level. The importance of this line is the way that it has been in existence for so many months, with the latest break of the oscillator of the neutral RSI 50 level to leave it standing at 60, an additional driver.
On this basis one would be looking for Savannah Resources to resume turn of the year bullish moves, especially given the way that the last couple of sessions have witnessed first an unfilled gap to the upside, and then an end of day close above the 50 day moving average. The latter is particularly significant given that this is the first break of the 50 day line since March. The expectation is that especially while there is no end of day close back below the 50 day line we should see an acceleration to the upside for Savannah Resources, with the favoured destination over the next 4-6 weeks as high as the top of a falling trend channel from January / April resistance towards 8p.