From the perspective of a technical analyst it can be said that over the near-term there have been a couple of standout features on the daily chart of Starcom PLC (LON:STAR). The first is the way that ahead of the massive spike in December the shares left unfilled gap to the upside, and the second is the way that following the spike there was such a sharp retreat.
However, consolidation in recent weeks looks to have run its course in the sense that decent basing has been the result. On this basis it is possible the draw a rising trend channel on the daily chart from as long ago as September, with the floor of the channel running towards the 8p level.
This area is now the end of day close stop loss on the buy argument with bulls currently backed by the way that the RSI has pushed well above the neutral 50 level standing at 55. This oscillator buy signal should provide good near-term momentum as the shares move to retest the best levels of last year above 50p.
At this stage only cautious traders would wait on an end of day close back above the 50 day moving average at 10.15p before pressing the buy button. This is because it does appear that enough work has already begun here for the shares to resume their recovery pattern.
