Is this the future for Rainbow Rare Earths?
14th July 2022 07:42
by Alistair Strang from Trends and Targets
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After an exciting couple of years, the share price has turned south. Independent analyst Alistair Strang looks for clues that the selling is over.
We’re continually asked about Rare Earth companies, Rainbow Rare Earths Ltd (LSE:RBW) being the latest to invade our mailbox. Needless to say, the company website leads with an inevitable picture of a wind turbine, along with references to the need for the fabulous magnets used in power generation.
Armed with this information, we’re understandably puzzled at the immediate lacklustre behaviour of their share price. At time of writing, it’s trading around 12.25p.
Some immediate hope appears possible as movement above just 13.25p looks like it shall prove important, calculating with the potential of a lift to 14.5p next with secondary, if bettered, at 15.4p.
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Visually, this secondary ambition is a slight problem, failing to exceed the most recent share price high back in June. As a result, there appears a certain risk of some hesitation at such a level.
Past performance is not a guide to future performance.
Of course, if the company opted to release positive news, everything could change fast, as acceleration to 19.5p works out as very possible. If the company does have any serious positive news to release, it looks like the 15.5p level would represent an ideal point in time to provide maximum benefit to the share price.
If everything intends to go horribly wrong, the share needs to trade below 10.5p, a visual nightmare and one which risks triggering a reversal cycle with an eventual bottom at 5.25p.
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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