Shares of Premier African Minerals Ltd (LON: PREM) fell 5.26%, extending their current downtrend and dashing investor hopes of another massive uptrend similar to the March rally.
Investors have been waiting for PREM shares to rally since the March parabolic rally ended in a massive selloff eroding most of the previous gains.
However, a sustained rally is yet to happen, although the shares rose briefly after hitting the support one shown below as the bulls stepped in to defend the level. The rally was short-lived as the shares resumed the downtrend.
The setup on the chart below shows the formation of a descending triangle pattern, which is a bearish chart pattern that leads to a break below the support level, but bullish investors should not throw the towel in just yet.
The current support level has held since the March rally and shows no signs of breaking at the moment, making a solid case for the bulls. If the support level continues to hold, we will likely get a rally off the level soon.
From a fundamental perspective, PREM shares are well-supported, given that the firm was awarded an exclusive prospecting license for the Zulu Lithium and Tantalum claims in the Fort Rixon district of Zimbabwe.
Rising global demand for lithium as a battery metal means that its products shall fetch reasonable prices once it starts mining operations, which is still a distance away.
All in all, the bullish case for PREM is much stronger than the bearish case. Still, as we all know, nothing is guaranteed in the markets, and we could just as easily see the price break below the support level and head lower.
Premier African Minerals share price.
Premier African Minerals fell 5.26% to trade at 0.18p, having dropped from Tuesday’s closing price of 0.19p.