Most traders will be all too familiar with the concept of “catching a falling knife”, with the problem in such circumstances tending to be that having bought low there is the dilemma of whether to add to a position – doubling up, or simply head for the exit? In the case of Transense Technologies plc LON:TRT we have a situation where the stock has been in a steep decline for much of the post November period, with only a brief flurry to the upside at the beginning of last month.
This came in the form of a bull trap through the 50 day moving average then at 2p plus. It is now down to 1.57p and is likely to be a pivotal feature as far as the near term price action is concerned. Indeed, we are looking at a situation for Transense Technologies plc LON:TRT where given the strong bullish divergence in the RSI window, the surge in traded volume and the bounce off the 2014 price channel floor, it would appear that we have multiple positives in terms of the technicals currently. Indeed, the view now is that at least while there is no end of day close back below the initial April support at 0.97p we should be treated to an initial 50 day moving average over the next 1-2 weeks. After that a larger ascent is expected towards the top of last year’s price channel / 200 day moving average towards 4p – although this is on a 2-3 months timeframe.