The autumn dive for shares of APR Energy from 600p to below 200p speaks for itself in terms of the bear festival that the latter part of 2014 delivered. However, the better news to start 2015 is that this appears to be a relatively fast moving situation, in both directions. The start of what has already been a notable recovery for the stock was flagged by a recovery of the 50 day moving average, still falling at 215p. The general rule is that the strongest of rebounds in stocks and markets tend to begin with breaks above key falling moving averages such as the 50 day or 200 day lines. In the case of APR Energy now we see the initial pullback from what was former November resistance above 300p, something which suggests that the shares could be forming the right hand side handle of a Cup & Handle reversal, one which has been playing out on the daily chart since the beginning of December. The view now is that one would be buying into the present dip, with the stop loss in the first instance an end of day close back below the 10 day moving average at 268p.
As far as what the upside may now be, the best case scenario would hint at a top of November rising trend channel target at 500p over the next 1-2 months. This would take APR Energy through its 200 day moving average level at 459p and change the trend officially from bear to bull.
