Interactive Investor

Versarien: More volatility for this popular small-cap

This widely-followed share gives our chartist plenty to get his teeth into. Can its recovery continue?

2nd April 2019 09:41

Alistair Strang from Trends and Targets

This widely-followed share gives our chartist plenty to get his teeth into, but can its recovery continue?

April appears to have started with positive feeling across the market place. Of course, it could be an elaborate practical joke by politicians, designed to obscure the slightly important detail they are failing to govern the country. 

Are they really voting to decide whether to have a vote about a vote? The TV show, "Yes, Minister" seems now a work of documentary.

When we last reviewed Versarien (LSE:VRS) in February (see above), we'd speculated on the potential of the graphene producer dropping to 62p. The intervening period highlights the share price "only" relaxed to 67p before exhibiting a reasonable bounce, with the result that some optimism is possible for the future.

Source: Trends and Targets      Past performance is not a guide to future performance

The immediate situation appears quite straightforward.

Price growth exceeding 120p should now make an attempt at an initial 125p. Visually, the price has form at this level, suggesting some sort of stumble awaits. Longer term, in the event it manages above 125p, we're calculating a secondary at 145p, along with the potential for future game changing growth.

We're pretty comfortable proposing a glass ceiling awaits at 125p, if only due to the whole bunch of folks trapped at this level since October last year and exercising common sense to bail at break even. This alone is pretty certain to cause a stutter.

Of course, there is also the bunch of folk who can draw lines, assuming the price is about to hit this mythical thing called resistance. With closure above 125p, we'd take this as early warning for longer term growth above the 125p "glass ceiling".

The share needs to wither below 100p to justify raised eyebrows, once again entering a weakness cycle with 60p calculating as the next target. If broken, it should bottom at 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. 

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