Faron Pharmaceuticals: Has this AIM share finally bottomed out?
13th November 2018 08:44
by Alistair Strang from Trends and Targets
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This biopharmaceutical company's share price has suffered a dramatic drop this year, so chartist Alistair Strang gets out his microscope and diagnoses its movements.
Faron Pharma (LSE:FARN)
In addition to exquisitely illustrating how annoying English pronunciation can be, Faron's share price also displays something which, from our perspective, is fairly noteworthy. Essentially, we hope the share is trading "at bottom" and awaits some news.
For us, the 57p level is now crucial. Since the market saw fit to plunge the price from the nine quid level down to current at the start of May, it has been trading in a region where logical bottom - from a big picture perspective - is now at minus 220p. Obviously, this level is impossible and simply highlights a nuisance side effect of playing with numbers.
However, while some considerable hope may be taken from the fact the share is still trading, price movements since May now bring 57p to the table as an important number.
The price cannot afford to close below this level. If it does, we cannot calculate bottom, even from a near-term perspective, and this would be a bad thing!
Should we take the stance of assuming the share price is now at "bottom", essentially messing around while awaiting some sort of news, it appears critical the share now trades above 88p to start a cycle to an initial 105p.
If bettered, our secondary does exceed the immediate downtrend but unfortunately comes in at 121p.
Visually, this is a similar level to highs experienced since the price massacre. Only with closure beyond 121p will it appear some miracle taking place with quite solid strength of recovery possible.
Source: Trends and Targets Past performance is not a guide to future performance
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.
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