Range Resources (RRL): Initial Oscillator Buy Signal

PUBLISHED: 24 Jan 2013 @ 16:08 | Comments (0) |

Range Resources (LSE:RRL): Probable Falling Wedge Buy Formation

While I am aware that on both a technical and a fundamental basis shares of Range Resources have presented more false dawns than an Arctic spring, it does look as though we are in the most encouraging position technically for quite some time. While this is no guarantee that the extended bear run is about to end, particularly given the contempt that some fundamental tipsters have for this stock, I am obliged to look at the positives here from a charting view.

The first is a signal which has already come through and has so far had legs, the break of a RSI trend line in the oscillator window around the 40 level, versus the 50 level the indicator is at now. This may not sound like much, but it is one of the few reliable leading indicators around. The second feature here is what appears to be a so called falling wedge pattern alluded to in my last update. The promise here is that as little as an end of day close back above the 50 day moving average / July 2012 resistance line at 3.75p could lead to a quite explosive move to the upside, if only a temporary one to target post November resistance towards 4.5p. The fact that the RSI is already flagging such a breakout would mean that aggressive traders could go long with a stop loss at or just below the recent 3.05p January low.

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