Liberty Star Uranium and Metals Corp Goes Into High Volume Correction

LBSR went into a high volume correction and is currently in a very high volatility state.  It tested the lower range of support near .06 cents and reversed higher very strongly to close the week out.  This penny stock will now move from a high volatility state to a low volatility state that will likely take several weeks.

We pointed out in our last post on this gold and uranium mining penny stock that we likely topped out because of the one day volume reversal doji.  It looks like our timing was spot on in that regard.

The big heavy volume drop right from the highs is usually not something you want to see.  KATX had a similar very high volume drop from its .25 price point and now it has eventually broken under support and the uptrend has pretty much ended.

I suspect that LBSR will trade higher in the days ahead as it springs back in rubber band like fashion back to the top of the range.  I think it will trade higher in the days ahead to the point where it might even fill that large opening gap down of 2 days ago.  This should cause some supply to come into this penny stock and lead to an eventual reversal down again to create a trading range.

We should be entering some type of trading range for at least 2 to 3 weeks from this point.  The key will be to see how LBSR does its retest of the .0631 level.  After this reaction up I suspect that we will eventually see a retest of the .0631 level to create some type of double bottom.

If this penny stock is strong enough then it will not be able to be pushed all the way down to .0631 and may hold ground slightly above at .065 or slightly higher on the retest..  That will be the first sign that LBSR still has some strength and will continue to build a constructive trading range which may lead to an eventual breakout higher.

They key word in the last paragraph is ‘may’.  LBSR is not in a volatile trading range and it has to work off some of the overbought situation.  This will take some time for the new form to take shape.  Only at a later point in time will it become clear whether or not this penny stock has the juice for another major run higher.

More updates as warranted…