One of the problems in terms of charting the smallest of small caps is the way that a relative lack of liquidity and very often binary newsflow means that there is simply not the smooth flow to the price action one sees higher up the market.
While in part such an argument could apply in terms of the recent charting history at Great Western Mining (LON:GWMO), the situation is clearly saved by the way that in the post December period we have seen support for the shares come in towards 0.5p and what was previously the pre September floor this market. In terms of the fine detail it can be seen that for 2014 the intraday low was 0.52p, whereas the start of February 2015 has delivered a 0.45p support.
This lower low looks as though it is going to be a bear trap event, especially given the way that this stock has rebounded relatively quickly back above 0.52p. The key over the near-term will be whether last year’s low will prop up the shares and the squeeze that we have seen over recent sessions is enough to mark a lasting floor for the stock.
At this stage aggressive traders would already be going long with a stop loss just below the February low, with the ideal scenario being that there is a weekly close back above the 50 day moving average now at 0.61p either this week or next week. The technical target would then be former November resistance at 0.8p plus, just above the present position of the 200 day moving average at 0.79p over the next month.
