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Nickel Asia Corporation (NIKL) Bound To Drop

Nickel Asia Corporation had its initial public offering (NYSEARCA:IPO) in the Philippine Stock Exchange last November 22 with “NIKL” as its stock code. The stocks had an IPO value of PHP15.00 then went all the way up to PHP23.00 within 3 months. From there on, it started reversing its course and consolidated to what could be a 2-month head and shoulders pattern. Head and shoulders are often bearish reversal patterns and could be found at the end of an uptrend. If  the NIKL stocks breakdown from the neckline of the head and shoulders, it could drop all the way to my target price of PHP17.70 which I got by adding the size of the head’s base to the possible breakdown point. However, before it reaches that level, it needs to clear out the PHP19.20, PHP18.50 and PHP18.22 levels of support. On the other hand, if it doesn’t breakdown, the stocks could continue to rise and reach its immediate resistance at PHP21.05. Then if that hurdle gets cleared out, the PHP23.00 all-time high could be aimed next.

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