Applying the principles of the classic Wyckoff Method:
This is what will need to happen:
After closing the gap at 1340 which acted as a strong magnet in the absence of positive share news, Renergen must now quickly move back above the trading range in order to confirm this move as a spring. The share may find support from the rising natgas prices and a weaker dollar, which prices it tracked in the past until July this year, (when it disconnected likely due to the rising dollar, )as well as a more favourable risk asset environment heading towards year end. The shake out is on higher volume, which is not ideal, but may be due to the risk off environment, demoralised bulls and triggered stoplosses from a quite large oversold move to fill the gap.
According to Stockcharts Chart School
Springs or shakeouts usually occur late within a TR trading range and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the trading range and then reverses to close within the
TR;"
"It is in Phase C that the stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up. As noted above, a spring is a price move below the support level of the TR (established in Phases A and B) that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, this marks the beginning of a new uptrend, trapping the late sellers (bears). "