Don’t Buy Lonmin Shares!

PUBLISHED: 28 Oct 2015 @ 07:38 | Comments (0) | More info about Azeez Mustapha

Lonmin shares (LSE:LMI) are supposed to continue going further and further south, given the current price action and the dominant bias in the market. What is happening right now is a good opportunity to go short again.

4 EMAs are used for this analysis and they are EMAs 10, 20, 50, and 200. The color that stands for each EMA is shown at the top left part of the chart. It can be seen that all the EMAs are sloping downwards, with a clear Death Cross, denoting that the bearish outlook on the market is very strong. This is a type of the market in which adamant bulls are punished.

Recently, the price made a shallow rally attempt, trying to cross the EMAs 10, 20, and 50 to the upside. The rally attempt was halted, making the price to come down again. This is a bearish signal: The price could attain the demand levels at 20.00 and 15.00 within the next several months.

Unless the EMA 200 is breached to the upside, the bearish bias would be valid, plus long trades would not make any sense.

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