Market analyst Regina Meani discusses YouFoodz Holdings (ASX:YFZ, Aroa Biosurgery (ASX:ARX), Karoon Energy (ASX:KAR), Panoramic Resources (ASX:PAN) and BHP Group (ASX:BHP).
While the last half of 2021 saw the benchmark All Ordinaries Index oscillate within a 6% range, there were some highlights from Your Technical Analyst during the period, which exceeded the benchmark. As is our want every six months we take a backward look through the technical reports.
The second half of 2021 produced less “calls to action” than the first half, with five during the period. However, we were conscious of the pervading atmosphere of the market and in many occasions provided trading trigger points for the stocks covered.
One of our more memorable highlights for the period was YouFoodz Holdings.
In our 5 July report, our story was the “Changing Food Supply” in which we featured YouFoodz Holdings at a price of 54c. It was evident from the share price action that there had been a change in thinking about the stock. As we stated in the report, the downward trend from January 2021 was broken on 30 June 2021 with the price rise through 47c. When a technical analyst sees a change in trend like this it tells them that whatever was driving the price for that period, and in this case a downward influence, had changed and that there was a paradigm shift with a new influence appearing. This turned out to be a significant change in direction for the stock.
In our report we suggested that there may be a buying opportunity with support at 51c and then more importantly in the risk area at 45-46c. At the time of writing, we deemed it unlikely that the lower levels would be breached. The buying opportunity appeared on 5 July with a price range between 49c and 54.5c and again on 12 July with a price range between 51c and 52.5c.
Your Technical Analyst expected that under normal circumstances that the stock would take some time to reach its 90c-$1.00 objective but obviously the management of Hello Fresh saw their opportunity to made a bid for the company which hurtled the price to its objective in one day’s action. Over the course of Your Technical Analyst’s career, there have been many situations where a paradigm shift in the share price has been the precursor to a takeover situation where the anticipated road map is accelerated.
For those traders and investors who took advantage of the buying opportunity between 5 and 12 July it would materialize into a minimum gain of 65% but possibly as high as 89% for just over a week.
On 23 August 2021 we moved to the health sector with a report on the soft-tissue regeneration company, Aroa Biosurgery when the share price was $1.02. At the time we set an objective for the stock to the $1.22-1.30 barrier zone. The price reached $1.25 on 6 October and was deflected from the barrier zone with the prospect of selling on the following day between $1.215 and $1.235. The minimum gain would have been 15% but with the potential of 23%, depending on the entry and exit strategy.
Our next “call to action” occurred through our “Well-Oiled- Part two” report on 11 October 2021 with Karoon Energy at $1.625. We noted that Karoon closely followed the oil price and at the time both were approaching zones of significant resistance. Both experienced an initial rebuff from their barriers pulling back to seek support. Karoon’s main support was located around $1.50 and the price turned from $1.53 on 14 October providing a buying opportunity and the momentum to retest recent resistance and forge higher through the $1.70-80 barrier to reach $1.93 on 2 November. At this point some may have taken profits after realizing a gain of 26% being prompted by divergent momentum for both oil and Karoon, indicating a pullback. For those traders and investors that held their positions, the $1.50 support remained in December prompting another rally through resistance to reach towards our $2.00 objective on 17 January this year. This gain will not be added to the 2021 performance.
On 1 November 2021 our “call to action” occurred in our report: “A Panoramic View” in which we turned our attention to the nickel price and the Western Australian company Panoramic Resources. Trading at 24c at the time we were looking for the share price recovery to continue to follow the Nickel price and that momentum conditions suggested that the price may still push higher but may need some breaks in the short term. The next barrier zone for the stock was between 30c and 36c. The price didn’t achieve the barrier zone until the first week in January and the 25% gain will not be included in the 2021 average. However, it is worth noting that the pullback from the barrier may provide further buying opportunities and would refer our readers to the 1 November report for more information.
Our final “call to action” for the year occurred with the Big Australian, BHP on 29 November when the share price was $37.83. We wrote at the time: “The current price action has declined from the $54.44 peak to seek support in the $35.50-70 area. The price has held the support from 29 September and is exhibiting selling exhaustion. This bodes well for a rally beyond the phase and is likely to provide trading opportunities ahead of a more constructive rebalancing of the upward path”.
We went further to suggest that: “a price rise through $39.30 would indicate a rally towards $42.50 and possibly towards $45”. The price rose through $39.30 on 30 November and oscillated higher to reach $42.50 on 4 January and $45.00 on 11 January forging higher to reach $47.98 on 20 January. These January figures equating to 8%, 14.5% and 22% respectively will not be included in this report.
During the six-month period we also provided updates for gold, platinum, copper, oil and nickel prices.
Working on the six-month period, investors would have had the opportunity for an average gain of between 35% and 56%. Traders may well have exceeded these gains as there were numerous occasions sited in the reports in which they may have taken advantage. From the above we can see that there were three “calls to action” in the last quarter that have only seen their minimum achievements come to fruition in January and this bodes well for our July 2022 report.
Ends
