Interactive Investor

A small-cap share that deserves to be taken seriously

6th July 2022 07:55

Alistair Strang from Trends and Targets

It's been a post-Covid success story, but what does independent analyst Alistair Strang make of this volatile AIM share?

For some reason, a few folk appear to believe something is happening with Equals Group (LSE:EQLS), a company that develops payment platforms which allow clients to move and manage their money flow.

In honesty, the website blurb is all very familiar, all the usual promises made, all the correct buzzwords emplaced. And then you discover a few further details such as their five-year agreement with Mastercard, their partnership with Citi Commercial Bank, even part of Bank of England's Faster Payments Scheme.

Armed with this information and more, it becomes fairly clear Equals Group are rather more than a “look at us” contender in the payment platform field and, instead, the AIM listed company deserves to be taken quite seriously.

Their share price, trading around 87p at time of writing, enjoyed a +10% day on Tuesday, the price gapped from 80 to 83p at the market open and experiencing a high of 89p during the session.

We can now calculate it needs to exceed 92p to hopefully trigger further travel to an initial 92p, along with the chance of some slight hesitation. Things become a little less clear with closure above 102p, thanks to our secondary working out at 121p.

Past performance is not a guide to future performance.

Our reticence about this target level comes due to an ability to calculate a longer term third target level at a future 147p, visually matching the all-time highs experienced back in 2018.
 
It’s easy to believe positive news flow will be required to provoke such an impressive series of movements.

If everything intends to go Boris-shaped, the share price needs below 67p as this risks serious trauma, an initial target of 57p probably being a footnote in history in a downhill charge to a painful 28p bottom eventually.

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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