Liberty Star Uranium Metals Corp To Fall Back to Up trend line

Today the volume shrunk once again on the penny stock Liberty Star Uranium & Metals Corp.  Today does not show any indication of upside reversal.  As indicated in previous posts penny stocks penny stocks dot come expects LBSR to drift down for a retest after having previously filled its opening gap which we predicted earlier.

So today looks like a resting point and half way move pause before the rest of the half way move is completed in the days ahead.  The uptrend line looks better defined now and is likely a target area for support to come in.  It looks like .07 to .08 cents may be the upcoming low point.  It will be very important for this level to hold in the days ahead to keep the trading swing rang intact.

We could see as low as .062 again, but I would rather see Liberty Star Uranium & Metals Corp hold ground at .07 to .08 for a more bullish picture to develop.  Still, as long as the up trend line holds then LBSR should be on fertile ground for a new move higher after that.

We also indicated in previous posts that volatility would decline and that volume would also shrink which is exactly what is happening.

There is still the outside concern that the super high gap down very high volume down day that started this correction was too severe and may have permanently damaged the uptrend.  This is still unknown at this time.  KAT Exploration had a similar very severe high volume down day and that turned out to eventually destroy the uptrend.

But again, I don’t want to be too premature with LBSR. I still expect support at .07 to .08 to hold and then another move higher after that.  I need the price chart to fill itself out more before I can make a better determination whether the damage done on 9/2/2010 was enough to completely destroy the uptrend.  For now I do not believe it was, but it is just something to keep in mind as the trading range develops.

With penny stocks one can never take anything for granted.  The unpredictable is pretty much a given and one has to remain on guard for both bullish and bearish possibilities at any time.