Tern Plc: here's why this price level is important

After plunging in March, shares in this AIM firm have surged. Our chartist looks for another major catalyst.

Tern Plc (LSE:TERN) 

When we last reviewed venture capitalists Tern (LSE:TERN) in October, we projected a bottom of 4p.

The entire world had to catch a cold before it finally dipped to target and the bounce has been fairly impressive.

• Here's what the analyst thinks about Tern shares

Once Covid-19 clears up, it will be interesting to see how Venture Capitalists are in demand, given the number of companies who've run low, often critically low, on financial reserves.
 
On the basis that Tern are about to find themselves able to cherry pick opportunities, we have looked for a trigger level with the intention of identifying the point at which the share price recovery becomes "safe".

It is worth remembering the word "safe" has no business in a discussion about share prices.

It appears the 15p level shall prove important for the future as this calculates as a point capable of triggering some fairly strong upward travel.

To cut to the chase, above 15p should prove capable of an attempt at 19.7p next and some hesitation, if only due to the historical glass ceiling awaiting.

Above 19.7p and the future becomes quite useful with a secondary calculation of 25p (and beyond) awaiting in the distance.

What is a little odd about Tern has been its 'failure to launch', despite repeated attempts since its thrashing in 2018. For this reason, we elected to place a trigger level at a point above which movement becomes difficult to rescind. 

Finally, if we dwell on danger levels, below 9.5p looks especially troubling, apparently capable of provoking reversal to 4.75p.
 
For now, the share looks almost ready to fly and thus, similar to the major airlines, it is fingers crossed time.

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.