We touched on the TA side of PO3 on another thread today and thought I’d start a separate thread and see what we can glean from looking at the PO3 chart.
As I have stated in the past on other HC forums, I am more of a fundamental investor but
always consult a chart as part of my investment process as they can be very useful in providing entry/exit levels and showing support/resistance levels.
Especially as it pertains to small cap companies or tightly held stocks like PO3, TA holds less credibility as TA is based on patterns established from historical performance and the concept that those patterns repeat. In small cap companies that are often lightly traded, the depth of information limits the ability to create reliable models. Notwithstanding this, I still always consult the charts.
So what does the PO3 chart tell us about Po3 and its potential future price action?
Disclaimer: I do not claim to be a technical analyst, but do claim to know enough to be dangerous.
The chart below is from Big Charts.
View attachment 1357771My analysis/conclusions:
- PO3 (then WRG) has headed south in virtually a straight line (excluding a brief period in 2012 from the start of its life on the ASX in 2011.
- The stock bottomed around 2013 and stayed along the bottom for almost 5 years.
- In late 2017, PO3 (still WRG) consolidated and started a new life with the stock moving quickly (in about 1.5 months) from 20c to 90c – a gain of 450%.
- The stock has been consolidating for the last 10 months and corrected, at its deepest point, 74.2% of its 450% move.
- The move that began yesterday saw a 595% gain from the most recent low of 44c (to $2.62) or a 689% gain from the low of 38c in June. Let’s split the difference and call it a 642% gain.
- Today’s intraday correction to $1.80 saw a 37.6% correction of the move from 44c to $2.62 – very close to a classic 38.2% Fibonacci retracement.
- Assuming the next leg up in the stock is in keeping with previous moves, we’re talking a share price around the $10 level.
- The following resistance areas are a bit arbitrary as the charts I can access don’t give me enough granular info to give more precise estimates: $4-6, $8-10, $15, $22, $26 etc.
- We have an ultimate chart target around $48 (20x Parfet's entry) – assuming it doesn’t break the chart...
These levels may seem crazy, but Parfet isn’t here to double his money.
The story is big enough to support such valuations given proper execution; which with Parfet on board should now be very achievable. The company must be considering a US listing and IMHO the stock would double from wherever it’s trading just on the back of the valuation/revaluation the Yanks would give it.
In short, based on fundamentals that are strongly aligned with the technicals I haven’t sold a share, and won’t be in the foreseeable future.
(20min delay)
