Engineering for the future

Stock Watch

by Regina Meani

Market analyst Regina Meani discusses Austin Engineering (ASX:ANG).

Austin Engineering (ASX:ANG $0.25) designs and manufactures customised dump truck bodies, buckets, water tanks, tyre handlers and other products used in the mining industry. Providing a complete service, the company offers on and off-site maintenance and repair as well as heavy equipment lifting. Austin has manufacturing sites in Australia, North and South America and Indonesia. With a global engineering operation, through its centres in Australia and North America, Austin is focusing on research and the development of new and innovative products.

The share price history for Austin resembles a roller coaster ride. From a low point in 2004 at 22.5c the price rose dramatically to reach towards $4.00 in late 2007 before taking a dive to 78c in February 2009. The price rebounded from a significantly oversold position to climb beyond the recent high to $5.44 in mid-2011 where it experienced a correction to support located around $3.00.

The price rose again and oscillated within a broadly ranging top, setting a new high at $5.96 in March 2013 before the price collapse began. Initially dropping to the $3.00 support area in the latter half of 2013, the price broke lower in early 2014 and plunged through 2015 to find a low and turning point at 8c in June 2016.

Divergent momentum promoted a strong rally to meet resistance and pause at 22.5c from October through December 2016 to pullback in the first half of 2017, breaking higher to reach 30c in January 2018. The upward trend proved unsustainable and the price declined through 2018 and 2019 to find another momentum turning point at 10.5c in March 2020.

From here the price has oscillated higher and is currently testing previous resistance in the 26.5c to 30c range. The price may pause in this range ahead of breaking higher and moving towards 35-40c and then 65c and 80c and potentially beyond. A drop below 22c may indicate a deeper corrective phase with support at 18.5c but a further breakdown would suggest that the new upswing maybe delayed or negated.


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