Regency Mines: The Shares Skydive

The shares on Regency Mines have consistently shown weakness up till now: something that is expected to continue further. This is a bear market and it is very dangerous to go long right now. On the other hand, a discreet seller would have made a huge profit in this market, particularly those who sell rallies in the near-term. This is a high probability methodology. A high probability methodology is a speculation idea or stratagem that can produce average winners that are bigger than average losers - that survive a transitory losing streak. This enables speculators to stay in the markets for eventual gains.

Technical Forecast

Regency Mines stock has plummeted severely, and it seems there is no end in sight to this weakness. The price consolidated lower at the beginning of this year, topped at 2.65 (in April in which there was much volatility), and has continued to fall since then. The price closed at 0.865 yesterday. Imagine what amount of money a trend-following short-seller would have made! Technically, ADX 14 and Stochastic default parameters are used on the chart representing this stock. The EMA is sloping down seriously as the price remains below it. As long as the price remains below it, the current scenario will remain valid. The Stochastic is in the overbought region, and it can stay in that region for a very long time. The important resistance levels are 0.900 and 1.00, whereas the crucial support levels are at 0.800 and 0.700. The aforementioned resistance levels ought to do a good job impeding possible bullish effort.

When would the price turn and become dependably bullish? This question might come to your mind. The answer is that only selling at higher prices would be recommended now. A versatile speculator that has a strategy which makes money in bear markets would only buy rallies into resistance levels. It would be sensible to buy only if the market closes above the EMA 14. Remember, only when it closes above the EMA. At that time, the Stochastic should be heading to the overbought region, meaning that the trend has changed. While in this market, an adept risk managing trader would only sustain a negligible drawdown even if they were caught on the wrong side of the market. The effect of the uncertainty is limited to the amount of the portfolio that would be lost on a position if the price goes contrary to the expectation. Woes betide the adamant bull if they refuse to stay out of the market (i.e. only the permabull will suffer in this kind of the market)… or else their adversaries would be forced to expiate their rashness.

Conclusion: You can now see what is happening to the Regency Mines shares. Technical analysis clears up ambiguity and makes a possible market bias clearer. It invites insightful investors and shows them the realities of the markets.  It should be averred that the market is moved by people - tangible people’s reactions. The volatile fate of a portfolio shows the results of a market speculator, apart from what transpires on the chart. A highly skilled speculator will realize gains eventually, irrespective of what transpires on the chart. Conversely, a mediocre trader speculator will probably not realize gains, irrespective of what transpires on the chart.

This article is ended with the quote below:

“If a stock is not doing what I expected, that is a reason enough to sell. So, it is not a fixed time frame, but rather how things are going compared to my initial expectations. You can always get back in.” - Mark Minervini

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Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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