What has been interesting as far as the charting position and the price action at Porta Communications PLC (LON:PTCM) is the way that there has apparently been a divergence between the fundamental picture, and the ongoing attempts at stabilisation in terms of the technicals. This battle has manifested itself on the daily chart in the form of a multi testing of the sub 7p zone since October, a process which finally may have been completed this week.
This suggestion comes in the wake of the wide ranging reversal day served up during Wednesday’s session, one where the floor at 6.6p once again tested the double support points down at the 2014 low from October and November. The fact that the close at 7.37p was well above this probe could imply we have seen sub 7p for the last time in a while. Indeed, even if this is not the case the technical stop loss idea of an end of day close back below 6.6p looks a though it would be a money management point which would be held. In term of what upside we may expect in the wake of this likely flushout of the bulls, we can draw a rising trend channel from October with its resistance line projection running as high as 10p. This should be a viable 1-2 months target, while 7p plus remains in place as a base.
