Interactive Investor

Has rollercoaster stock AFC Energy finally bottomed out?

2nd August 2022 07:39

Alistair Strang from Trends and Targets

This small-cap stock rocketed almost 400% in just a few months at the end of 2020. It's fallen back sharply since, but independent analyst Alistair Strang thinks the shares may be worth watching again.

AFC Energy (LSE:AFC) appear to be doing solid work in the hydrogen fuel cell department, if their website is to be believed. Of all the green initiatives, anything which involves hydrogen, regarded as the most abundant element in the universe, deserves close attention.

Since 2009, AFC’s share price has enjoyed a rollercoaster ride, lots of false starts and sharp reversals tending to indicate they’ve been the focus of internet chatroom ‘enhanced optimism’ campaigns.

Even the recent surge to 92p in 2020 appears to be suffering the usual payback, the price currently at 26p and making us question whether the recent slip down to 19p shall be regarded as “bottom”. We certainly hope so as the only drop target we can now calculate below 19p is prefaced with a minus sign!

Our suspicion is the price has bottomed on the current cycle, making us think 28.5p can be viewed as a potential trigger, one which, if bettered, allows for gains in the direction of a near term 33p. In the event 33p is exceeded, our secondary calculates at 38p, returning the price above a prior, argumentative, uptrend.

Past performance is not a guide to future performance.

Thanks to AFC’s historical shenanigans, there are now some fascinating potentials we can give should 38p be exceeded sometime in the future.

We could tie ourselves in knots trying to explain a stream of different numbers but, essentially, with closure above 38p, the share price makes a careful step into territory where a phase of growth to a future 115p calculates as possible, a new all-time high.

If we judge by the emails received, it appears a few folk think “something” is happening with AFC and, as a result, it’s probably worth keeping an eye on them.

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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