ERHC Energy Inc (ERHE)

[TOB]

ERHE had 400,000 shares bought at .13 three minutes after the close of the day session.

So ERHE effectively opened and closed up from yesterday, on increasing volume which is the highest in 3 months. We see a big red candle on the chart below, but it 'should' be a doji.

We also saw .10, the former resistance, become exact support today. This is typical price action, after a break-out, the former resistance tends to get tested on a pull-back.

Watching price action doesn't predict the future. What happens next depends on who buys and who sells, but it does give indications of targets, and action points like support and resistance.

A break-out from a six month sideways channel, on increasing volume, is generally considered a bullish indicator.

For me, I consider the new support to be 10 cents, and the key support to be .0840

A move below the proximal support at 10 cents suggests an attempt will be made to breach key support at .0840

Alternatively, the proximal resistance is .14, and if we see a continuation rally we will expect another test of .14 then .15 and then key resistance at .18

As .18 is also the 52 week high, if this is breached we could expect some favourable attention from traders who react to this indicator.

A pattern of higher highs and lower lows will indicate a rally has started.

The green line below shows resistance at .10 acting as the new support.

Support and resistance lines are influences, but they are not absolutes. Once breached and confirmed they suggest trend changes, ranges, targets, etc.