LGO Energy (LSE:LGO) is a sentimental charting choice from my perspective since at the 0.6p and with a bull flag in October 2012 the possibilities of single penny stocks – on the upside – first became apparent. The position now more than 2 years later is that we see the shares well up on where they were a couple of years back, having peaked out at 6.95p in September 2014. The question now is whether what has been an understandable consolidation / retreat from the best levels has run its course, and the overall progression to the upside will resume promptly. What the bulls have in their favour is the way that since October the main support zone has been towards 3p and this has held despite a brief bear trap below the key floor last month. The ideal scenario now is that there is no sustained price action back below the floor of a mildly descending June price channel at 3p, and that while this is the case a return to at least the main December resistance at 5p will be seen as soon as the end of February.
Those who are perhaps on the fussy side in terms of timing would wait on a clearance of the still rising 200 day moving average (a very positive technical feature) at 3.34p, before taking the plunge on the upside. At this stage only a weekly close well below December support under 2.5p is seen as being outright negative.
