Having broken out of a Falling Wedge three weeks ago, Oriole Resources (LSE:ORR) is now consolidating around 0.52p-0.54p, reinforcing the zone as support. The price hit 0.63p a week ago then pulled back, but the Relative Strength Index (RSI) indicates the dip may be over with it staying above the black horizontal shown and Oriole is poised to try for new highs. With the 50 Day Moving Average (DMA) catching up, the price action will want to be swept up by the moving average as they meet.
A steady price decline has seen the stock spend much of the past two years below its 200 DMA. Wish the recent bottoming out of Oriole, the 200 DMA is now within reach, currently sitting at 0.65p – a close above here would be very bullish, as would be the crossing of the 50 DMA over the 200 DMA, known as a Golden Cross. The latter milestone is a little way off yet, but it’s in Oriole’s sights.
A longer-term target for the stock can be found at a height equal to the height of the Falling Wedge pattern at around 1p. The 1p-1.1p zone is an area of resistance that splits the chart clearly on a longer time frame. Success here would mark a full reversal for the stock and I would certainly be keeping an eye out for a ‘Cup and Handle’ formation at this point for clues, with the share price movements already hitting at a potential bowl shape.
Oriole is an exploration play on gold and is therefore highly speculative but, as is the case with many beaten-down stocks, the technical charts offer potential trading opportunities as it recovers.
