Regen BioPharma inc has had a torrid week, seeing a 78% collapse in share price since the high on April 12th. Could its fortunes be about to change? Price action since the April 12th high has traced out a falling wedge pattern, which is intrinsically bullish and expects a rally to follow a breakout of the pattern to the upside. See figure 1.
Note the contracting volume throughout the development of the wedge, which confirms the formation as corrective and strengthens the case for anticipating a break to the upside. If the breakout materialises, volume should begin to expand as the share price rises to continue confirming.
Price targets can be derived for falling wedges by measuring the base of the wedge and projecting that from the point of breakout. In this case, the method yields an upside target somewhere in the region of $0.0674, to be confirmed more precisely once the breakout occurs.
It should also be observed that the termination of the wedge is coming in proximity to the 78.6% Fibonacci retracement level, which has also historically acted as a barrier to price. Support from this level provides a degree of extrinsic bullish bias, which corroborates the intrinsic bullish bias associated with the pattern. This will be a very interesting chart to watch over the coming days and weeks. The next moves have the potential to be quite dramatic.