Shares digital

Aquarius Platinum (AQP)

In common with the metal whose extraction is Aquarius’ business, the shares have had a meteoric rise over the last month and a half, rising by 90%. The move was helped by the upside breakout from the sideways channel that had been constraining price action since the late summer. Such a rate of climb is not sustainable and with the metal looking toppy, the relatively modest head and shoulders pattern, which completed last week, signals potential for a drop toward 575p and a likely move toward a re-test of support from the base line of the bull channel that has been defining the major trend of the shares since mid-2005. Initially though such a move would be expected to test support from the old sideways channel top close to 635p.

SELL at 760p • Stop Loss 827p • Target 575p

SSL International (SSL)

Something of a recovery has been going on in SSL over the last couple of years and by the start of this year the shares had more than doubled since June 2006. Clearly a nice bull channel had developed and superficially things looked good. That is until the momentum RSI measure was examined and clearly it told a different story with persistent bearish divergence evidenced during the autumn and early winter. This gave early warning that the up trend was looking suspect. So it has proved with the shares pressuring the channel support line and finally breaking it at the start of the month. We now have a potential neckline in place which is supporting near to 443p and close to congestive support at 448p.

Though these features could produce a corrective bounce, the chances of it making gains beyond 495p seem slim. More likely seems to be the completion of a large top pattern that targets declines toward 310p and a return to a sideways ranging zone on the chart between 334p and 257p which was dominant between mid-2003 and mid-2006.

SELL at 456p • Stop Loss 500p •Target 310p

Rotork (ROR)

The shares of the automated valves specialist has no doubt been a beneficiary of increased infrastructure investment in the oil industry with their value appreciating by over four and a half fold since early 2003. For all of this time the bull channel, that is evident on the chart, has been constraining the extremes of price action. However, early this year the shares failed to rally off the channel support line and broke lower to finally test support from previous intermediate highs close to 780p. The subsequent rally has regained the channel, but it too has now run into resistance from previous congestion close to £10.30 and though it has pressured the downward sloping trend line drawn off the October 2007 highs, it has not broken the line conclusively.

While this resistance holds up, with momentum rolling over once more there seems to be grounds to expect further weakness to manifest itself initially towards congestion at 870p and then back toward 780p. What happens as and when this latter level is approached will be key to the long-term returns from this share.

SELL at 963p • Stop Loss £10.34 • Target 780p