torsdag 5 november 2009

STP - from a TA perspective

As we all know fundamentals drive SP and this possibly is more the case relevant to minor non production plays or plays with nonsignificant cashflow and own earning capabilities. The minute these plays goes from pure exploration to a company with true own and significant long term earning capability then for sure SP development can be quite explosive on the upside.

I therefore quite seldom use a TA approch for these smaller exploration plays. However I do know and find a TA approch as a very valid one relevant to e.g. larger plays and the stock market development as a whole.

Now clearly given STP recent annoncements and development where STP today is a completly new and transformed company when compared to just some weeks and months ago it sure is quite interesting to watch how this now plays out on the TA charts as well for STP.

This is now what I see relevant to STP in my TA charts. We have the range in between C$ 0.65 and .70 as a level we need to pass but this as I interpret it is bound to happen and possibly quite soon. When this level then has been cleared there is nothing stopping SP until and about the C$1 level.

Once there we're probably gonna stay there and build some momentum for a while untill SP again start to move quite aggressivly once it breaks the C$1.12 level. This is then a very significant event and most likely in order for this to happen we need some kind of fundamental support like e.g. incoming test results and evaluation of reserves, aquisitions, news from authorities, oil price break out on the upside or whatever.

However onve 1.12 has been passed we're then getting up towards the C$2 level.

At this point of time speculating what will happen once we reach $2 is somewhat far fetched but surley we're now trading in an uppward trading range. All depending now on what new the positive fundamantals are from STP that may be made public to the market in the future, we may see this trading range improving aggresively upbound from here on.

Personally I do beleive we're gonna pass and go weöö beyond the C$2 level once we're getting the formal ok for production start at McKay.

My advice cleary is to accumulate, stay long and add to your STP holdinga on any possible dips.

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