It is usually the case that the charting position of smaller, less liquid companies has all the appearance on a daily chart timeframe of the wanderings of an inebriate spider. This means that one tends to be trying to filter out the visual noise and identify the patterns below. In the case of Rare Earth Minerals (LON:REM), this complaint may have been true at various times in the recent past, but it can be said that currently we seem to be looking at a relatively straightforward setup. Indeed, it could be argued that the technical position is actually “simple”.
This is because near term support for the shares has so far come in consistently at or just below the 0.8p level since as long ago as June. In fact, it is helpful that the latest dip has come in just above the 0.8p zone, something which may hint to some that the consolidation we have seen for nearly 9 months in this area may be coming to an end with a positive conclusion. Further positive technical noises are added to by the way that there has been a double bounce off a falling January support line. This leads us to conclude that as little as an end of day close back above the 50 day moving average now at 0.9p should on this occasion be enough to take the shares as high as the 200 day moving average at 1.16p as an initial 2-4 weeks target.
