Romios Gold Resources Inc (CVE:RG) (PINK:RMIOF) corrected back down erasing most of the gains from Tuesday’s price rally after traders had found no reliable catalyst to support the buying pressure.
RG tanked 16.9% yesterday after the stock price bounced down from resistance at 65 cents. The stock had broken out of a variation of symmetrical triangle pattern, but failure to bust through higher resistance zone stopped the breakout.
Trading volume was 605 thousand yesterday, far above the average 330 thousand, suggesting the roll down will possibly continue further. Romios had no recent new, one of the reasons why the price rally wasn’t sustainable. The share price likely will drop back down to the consolidation range between 40 and 50 cents.
RSI momentum indicator currently favors bears – as the price dropped intraday the indicator moved down from overbought position, which is a very bearish signal.
The last time the stock shot up in a similar manner was in mid April 2011. Back then the company even stepped up to confirm they were not aware of material changes. The share price slowly returned back down afterwards over the course of roughly one month and that is the exact outcome traders should expect of the current price rally.
