Interactive Investor

A European small-cap share that's trending higher

20th January 2022 07:32

Alistair Strang from Trends and Targets

It's unlikely to be on many investor's radars, but this small-cap share's steady move higher has grabbed the attention of independent analyst Alistair Strang.

Our weekly plunge into Europe to search for something interesting has highlighted a company called Muehlhan (XETRA:M4N). A service company primarily active in wind, oil, marine, & construction, they’ve been going for 140 years, active worldwide, and of course we’d never heard of them. The corporate website “talks a good game” but we’re more interested in their share price potentials.

Presently trading around €3.7, share price movements over the last 14 years are finally becoming interesting, suggesting the share intends to move upward into a new trading range.

Initially, the eye is drawn to its historic trading range, and it looks very like there was a glass ceiling present around the €3.3 level. Significantly also, the share price is now trading above its pre-Covid high, and there’s a vague suggestion the price need only exceed the downtrend since 2007 to finally make an upward surge.

Source: Trends and Targets. Past performance is not a guide to future performance

At present, the share price needs to exceed just €3.91 to suggest it’s ready to commit higher. Obviously such a movement shall exceed the dubious downtrend since 2007, perhaps proving sufficient to convince the market something major is about to happen.

Growth such as this looks capable of triggering a visit to an initial €4.74 with secondary, if bettered, an almost certain €5.11. We’re able to calculate a third target ambition at €5.74, but suspect this shall require closure above €5.11 before it may become a reality.

For things to go horribly wrong, the price needs below €3 to justify raised eyebrows, risking a visit to €2.5 initially. If broken, our secondary works out at €1.90 and utterly destroys any optimism for the price to explore new highs.

Currently, for those folk who still pay attention to Europe, we suspect this one shall prove worth watching.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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