withoutwings

#SML - Possible Head-and-Shoulders

LSE:SML   STRATEGIC MINERALS PLC ORD 0.1P
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While Strategic Minerals would appear to be a great medium-to-long-term investment choice based on fundamentals alone; shorter-term the chart is forming something very closely resembling a head-and-shoulders pattern. If this completes by dropping below the neckline then it is likely to continue to be bearish in the immediate future to target up to another 1p lower (the delta between the shoulder height and the head height).
Comment: This is a really interesting one to try to set lower targets on for it to reach. Some (most?) references out there state that the target should be a head-minus-neckline size drop below the neckline - but if you do that here with the massive head it has then you're left with a target of 0.166p, which is clearly silly in SML's case given the fundamentals that have changed since it was last at that price. So I stand by the target range mentioned above, should the price drop below the neckline.

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