After a couple weeks of Easter Holiday affected articles, it seems right to go back into the swing of it with a festival of small caps and their charting activities.
A point that has struck me this week after seeing some quite impressive moves amongst the minnows is the way that on many occasions the most difficult situations to get a handle on are those that are simply going up in a straight line.
After all, the temptation is to rush in where angels fear to tread. But the nightmare of subsequently being caught high and dry in an illiquid situation which does not move from months is always one that focuses the mind of many a retail investor.
Rainbow Rare Earth Metals – A good example of a spiking stock
A good example of a spiking stock is Rainbow Rare Earth Metals (LON:RBW), where there has been a very steady performance so far this week.
Clearly, there is not much charting history to go on. But at least we can see how after the breakthrough February resistance, there is a projection line from the beginning of the year heading to 18p.
The view now would be that at least while the old February resistance behind acts as new support we could see 18p over the next few weeks, especially given the obvious momentum the break higher in the past few days.
Modern Water - an understandable cooling off?
Another high riser has been Modern Water (LON:MWG), where the membrane technologies group really has been the flavour of the month in share price terms, if not on the fundamentals.
The daily chart shows the stock back towards initial 2015 resistance at 20.5p.
This is the level one would be looking for the stock to achieve over the next month.
However, there has been an understandable cooling off of the shares after a move up from just 6.5p earlier this month.
The best way forward for fans of this situation would probably be to wait for any dip towards the present position of the 10 day moving average at 12.42p to unwind the overbought position.
At this stage only well below the 10 day line – under 10p, would really question the big break higher.
Biome Technologies – Incredible rise is quite daunting, look for buying opportunity
Biome Technologies (LON:BIOM) has seen its share price soar in the wake of last month's preliminary results for 2016, with the fundamentals boosted on hope for the group's bioplastics business and the launch of its new filter material.
While the incredible share price rise is initially quite daunting, last April's resistance at 194p is key.
While the shares remain above this former 2016 peak, any pullback can be regarded as a buying opportunity, with a possible end of 2017 target as high as 450p plus at a 2015 resistance line projection.