One of the more common phenomena ahead of most of the best moves in stocks and markets is for a countermove / bear trap which effectively stops out or indeed, panics out the weak hands. In the case of Venn Life Sciences (LON:VENN) in the recent past it can be seen how December served up the bear trap move, an event which culminated in what is called an island day reversal just below the 15p level and just below the former 2014 support zone. Since then there has been a near vertical recovery for the shares, with the price action clearing the trend changing 200 day moving average at the beginning of January.
Indeed, the near term moving averages have already delivered a key technical buy signal in the form of a 50 day / 200 day moving average golden cross, a trigger which very often is the forerunner of sustained and significant share price gains. In this case we would expect further progress within a rising trend channel from October, one which has its resistance line projection hinting at a target as high as 30p plus over the next 1-2 months. This would effectively target Venn Life Sciences shares back to where they were in early 2013. At this stage only a weekly close back below the 200 day moving average zone at 20p currently would even begin to delay the upside argument.
