6:00 am Pacific
John: Yesterday, Seafield Resources (SFF, TSX-V) opened at 56 cents, dropped to 54 cents and then climbed to a high of 62 cents. It closed at 58 cents for a gain of 2 pennies on CDNX volume 3.1 million shares.Ā Looking at the 2-month daily chart we see that after the sudden and huge move to 77 cents early in December, Seafield has been consolidating in a bullish downsloping flag.Ā Yesterday’s trading showed a definite breakout to the upside on the highest volume in the last 18 sessions, a very bullish sign.
The next major resistance will be at 77 cents (blue horizontal line). There is strong support at the bottom of the flag (green sloping line) and also at 50 cents which also coincides with the Fibonacci 38.2% retracement level.
The last 4 trading days have seen consecutive higher closings accompanied by consecutive higher volumes. These are the required ingredientsĀ to form a base for a breakout and a strong move to the upside. Ā The next Fibonacci target level is $1.04 (this is not a BMR price target as we donāt give price targets but a theoretical Fibonacci level based on technical analysis).
Looking at the indicators:
The RSI on January 10 bounced up off the previous RSI support level at 50%. It is now at the 61% level and climbing – very bullish with a long way to go before becoming overbought.
The Chaikin Money Flow (CMF) indicator has shown bullish buying pressure in the last 5 sessions with yesterday’s showing the highest pressure at .251 – very bullish.
The ADX trend indicator has the +DI (green line) climbing at 32 and above the -DI (red line) at 17. The +DI and the -DI touched on Jan. 10Ā but did not cross, keeping the bullish trend intact.Ā This was also the time when the RSI and price bottomed out (vertical blue dotted line). The ADX (black line) trend strength indicator is preparing to turn up at the 33 level. The bullish trend is strengthening.
Outlook: SFF appears to have bottomed out and is starting what appears to be the beginningĀ of a strong move to the upside in the near future.
Note:Ā The writer holds a position in SFF.
