KGN has made a classic Elliott Wave cycle pattern (I'm just not sure if it's a full cycle or part of a cycle). Anyway, the stock made a Head and Shoulder pattern late last year. That pattern suggests price will fall below the 'neck' of the pattern (red dashed line) by the amount the head (the peak) is above the neck. That calculation is the green line at $7.86 - suggesting price may have bottomed. The low is also very close to the 261.8% Fibonacci retracement of Wave A down from the top of Wave B. Another charting theory says that price cycles normally retrace 75% of the amount they rise (from the low just off the left of the chart to the high at 5. That 75% is the purple line which also coincides with the low. All very technical I relaise but what you need to take away is that all suggest the recent low is a bottom.

Price has  risen to break a technical downtrend line (a buy signal) and gone on to make higher troughs followed by higher peak on the daily chart (I'd prefer to see this higher low and peak sequence on a weekly chart but it is still a positive sign).

Price hasn't made a targetable pattern but I have an interim target of $13.50 which is a level of overhead resistance.

Coming of a significant low KGN has a much better chance of  rising than falling - we just can't predict how long that climb will be. In the previous price cycle just finished it rose 200% over about 13 months. If history repeats it could be a good long term hold (although the economic scenario is very different now from 2019).

KGN 25Jun21

 

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Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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