New World Oil & Gas (NEW): 2012 Resistance Towards 14p In Focus

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New World Oil & Gas (LSE:NEW): Rising 2011 Price Channel

Looking at the daily chart of New World Oil & Gas since 2011 and it can be said that actually everything was on track for sustained upside until the breakdown in October / November, not only back below the 200 day moving average at 9p, but also the nominal 9p range floor. In fact, by the end of November we have been treated to a brief bear trap dip below the initial 2012 support at 8p. What we have seen since then is quite a frequent phenomenon, a new leg higher starting after the longs have been shaken out below previous support.

On this basis one would be keen to chase the shares now that there has been a weekly close above the 200 day moving average at 9p on high volume. The suggestion is that while the present 8.25p January intraday low remains unbroken on an end of day close basis – the most obvious stop loss – one would be justifiably looking for a return to the top of the 2012 range towards 14p on a 6-8 week timeframe.

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