We last covered Amerisur Resources (LSE:AMER) two weeks ago at 13.4p, since then the company announced its final results for 2017. Amerisur is making progress, just crossing the line into profitability, and with significant production increases targeted against the backdrop of a very bullish oil market, it looks set to continue.
Looking at the chart, the share price hit 19p last week and has taken a breather, dipping back to 16.5p. There looks to be a decent level of support here, but should it fail, there’s a second support level around 15.75 and an additional safety net provided by the 50 Day Moving Average (DMA) in the same area.
Price action suggests a Bull Flag is forming which usually indicates a continuation of the move up once consolidation has occurred. It’s worth noting the last Bull Flag seen in late January failed. However, I put that down to the general macro conditions as it coincided with the strong market correction. The markets are again a little more volatile with yesterday’s 500-point drop of the Dow Jones, but withstanding a further market correction, I believe Amerisur is looking good for another go at breaking resistance levels.
The first port of call will be the diagonal resistance which put a stop to the last rally – that currently stands at 19.1p. A close above that diagonal red line will then free the share price to head towards the top of its trend channel. That’s slap bang in the middle of my Target zone which tops out at the main resistance level of 22p – the recent closing high to beat.