GPG - Guinness Peat Group (ASX)

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Chart Chat posted this chart in November But GPG did not trigger our entry level. It has since traded back down onto the ascending trend line and is setting up in powerful pattern to break through resistance of $2.19. GPG looks primed to go. The following are my comments from November and are still relevant.

GPG has consolidated for 4 months with rising lows creating an ascending triangle considered a bullish base pattern. With volume picking up indicating an increase in buyer support, GPG on a break of $2.19 would project a target of $2.48 - $2.60.

RDR - Reed resources (ASX)

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RDR has formed an ascending consolidation channel. A break of $0.545 should see RDR continue its uptrend to a projected target of $0.80 - $0.85

MEE - Metex Resources (ASX)

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To have a cleaner look athe big picture for MEE we look at the weekly chart. MEE broke its descending trendline to rally well and has since consolidated for most of 2006. MEE now looks set to continue its 'C' wave up to a target area of $0.15 on a break of $0.091. This scenario is supported by a bullish MACD and stochastics relationship and a compression of the multiple moving averages.

BPT - Beach Petroleum (ASX)

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BPT has consolidated for 4 months within a large equilateral triangle forming a base from which a strong move is imminent. BPT has traded outside this formation hinting the direction will be on the long side. Compression of multiple moving averages and a bullish MACD / Stochastics relationship support that on a break of $1.48 will projet a target of $2.03

RIO - Rio Tinto Limited (ASX)

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RIO has cleared its descending trendline and retraced 61.8% Fibonacci back onto its 200 DMA support cluster. After a small rally off this support level RIO has pulled back to give us a good potential entry point of $76.26 to go long.
Given that its stable mate BHP is still looking quite weak a change in sentiment for large mining stocks should see RIO perform very well with an initial target set at $89.50 - $94.30.

BKW - Brickworks Limited (ASX)

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BKW has broken its descending trendline which represented a correction back onto long term ascending trendline in an overall bullish trend. Having consolidated BKW looks set to swing high on a break of $12.26 for an initial target zone around $13.35 with a longer term new high of $15.28 - $16.50.

CAAS - NASDAQ

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CAAS after 4 months consolidation (bold) has broken resistance to set up a Pennant formation (blue) considered a bullish chart pattern. CAAS has broken out of the pennant and pulled back giving us a good entry point on break of $11.34 for a mirror move of this breakout pattern which targets the $14.40 - $15.00 range.

BAR - Barra Resources (ASX)

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BAR has traded back down onto support and recently broken through its descending trend line alerting Chart Chat that a change in trend is probable. We would prefer BAR to retrace a bit further before breaking our entry trigger of $0.28 for a target of $0.53, however, this stock character is for a rapid move and may not retrace.

HCY - (ASX)

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For variety Chart Chat has selected another small cap stock for readers of this report. HCY has been bottom browsing for several years as this weekly chart shows. However momentum seems to be building with rising lows (arrows) and a bullish relationship between the MACD and Stochastics. With volume on the rise reflecting an increase in buyer support a break of $0.021 would support a price of $0.04. HCY will meet some resistance at the $0.03 level.

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