Shares of Aben Resources (TSX-V:ABN, OTC:ABNAF) have risen 132% thus far during the month of August, however, this impressive move may be just the beginning of a much larger longer term move in ABN shares.
Let me explain…
You can see that the C$.50 level is key support/resistance on the ABN chart dating all the way back to 2012. More importantly, above C$.50 there is almost zero volume-by-price memory – what this means is that there has been very little volume transacted above C$.50 per share in ABN historically. This means that there is likely to be much less overhead “supply” than there would be in a stock with a lot of recent price history at overhead levels.
Another important thing to note on the above weekly chart is that the weekly-RSI(14) peaked out at well above 90 during last year’s rally that brought ABN shares from about C$.10 to C$.495. This year’s rally is more powerful, and looks to be more sustainable in many ways (recent tight consolidation). Therefore, we could very well see the weekly-RSI(14) move above 90 during this year’s rally before the first significant pullback takes place.
Turning to the monthly ABN chart we can clearly see that this is the highest volume monthly candlestick in ABN’s history:
Simply stated, a large full bodied bullish engulfing candlestick on record trading volume that follows a multi-month basing consolidation has a high probability of signaling the beginning of a larger move higher.
We saw a similar price pattern and large bullish monthly candlestick in GT Gold (TSX-V:GTT) last July, GTT went on to rally another ~160% over the next two months after that July 2017 candlestick was printed:
The rally in Aben Resources shares may be just beginning and a monthly close above C$.50 on record trading volume could be a powerful sign that large gains may still be in store over the next few months.
Disclosure: Author is long shares of Aben Resources (ABN.V) and may buy or sell at any time without notice.
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