Is this smart building company seeing the GameStop effect?

Rapid share price growth could be due to chatter on web forums, our columnist believes.

GSTechnologies

Sometimes it's easy to ignore the glaringly obvious. Once such instance came this morning while GSTechnologies (LSE:GST) was trading at 2.22p.

Glaringly obvious, from our perspective, for GSTechnologies, previously Golden Saint Technologies, has a trigger level of 2.22p. This company is a specialist in so-called ‘intelligent’ buildings and with ambitions to become a data centre owner.

It is experiencing share price growth which visually is reminiscent of an enthusiastic team of folk 'talking up' the company prospects in discussion forums.

This sort of thing always worries us, thanks to these events usually ending quite painfully for the majority of small, private investors. It certainly explains a plethora of emails asking our thoughts!

Above 2.22p and things calculate as being capable of some excitement, working out with the potential of an initial 2.6p with secondary, if exceeded, a rather surprising 3.7p.

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We cannot calculate beyond such an ambition presently, and of course, this does not mean a price cannot go higher. It just means we've run out of numbers.

As always with share prices powered by enthusiasm, it's worth remembering things can go wrong pretty quickly. Our comments on the $480 (£347) GameStop (NYSE:GME) share price last week proved painfully prophetic, as the price is still reversing and hit $46 yesterday.

Presently trading around the 2p mark, the GSTechnologies share needs to slump below 1.48p to indicate trouble, as this takes the price into a region promoting the chance of reversal to an initial 0.95p.

If broken, our longer term (or later that day) secondary works out at 0.53p along with a strong visual argument for a rebound. We cannot work anything out below 0.53p.

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.

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.