Xcite Energy needs a miracle
29th September 2016 10:33
by Alistair Strang from Trends and Targets
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The crime scene which is deserves a glance, though, like shareholders, we'd prefer to pretend a murder isn't happening. We'd a calculation which stated, if XEL managed below 1.18p, bottom target was -2.55p and this was from a near-term perspective.
As clients are painfully aware, the share price has been trading - from "big picture" formula - with minus signs decorating drop targets for quite a while.
There's virtually no positive spin we can put against recent price moves. The drop on 27 September appears to suggest the immediate downtrend meant something to the market, as the knife was given a nasty twist to avoid the price bettering it.
This at least gives us a 'blue' line which, if bettered, should suggest the market has had a change of heart.
We wonder how many shareholders need suffer due to a marketplace which cheerfully promotes "enhanced expectations" for companies, then walks away when reality strikes. Visually, XEL has joined , and in the list of casualties which litter the AIM.
In the event of a miracle, the first sign will be XEL managing to better 'blue' on the chart.
At time of writing, this level is exactly 2p.
Our (increasingly less dodgy) timeframe logic suggests XEL has a maximum of a further 8 days before yet another decision need taken against the price's future. In theory, there's an expectation of 2.62p with any moves now above this immediate downtrend. Secondary calculates at 3.25p.
Visually, neither ambition is particularly useful, as the share need must better the 'light blue dashed' trend line (dating from May 2015 and currently 6.15p) before we'd dare take any rise seriously.
If a grown-up were to investigate this share's movements, we'd propose three fairly recent price hikes as worth a hard look.
The first one came on 7 March with the surge to 29p. This looks designed to sucker investors against a naive hope the price was about to recover. The second one came on 10 August to 12.5p - to our cynical eye, another attempt to attract money. And the final piece of nastiness was 9 September and a lunge to 8.75p.
We're giving some pretty horrid further drop potentials if the company intends to remain tradingThe 9 September thing was particularly vile, from our perspective. It enacted a perfect "ga ga" - gap up above the immediate trend, gap down the next day to 3p.
It was almost as if the market were aware bad news was coming and tried to attract investment before any report hit the streets - but this is the UK and we cannot expect nonsense like that in our highly regulated marketplace, can we?
We've circled the 9 September surge above the trend, just in case people didn't notice. And restrained ourselves from emplacing clipart of a Sore Thumb as this would make the movement too obvious.
Finally, it's impossible to realistically calculate further drop targets. We monitor it on a daily basis for clients and we're giving some pretty horrid further drop potentials if the company intends to remain trading.
But once again, we'd emphasise it needs a miracle above 'light blue dashed' (dating from May 2015) and even then, we'll be watching with extreme caution.
And why are we so irritated? You have no idea what these repeated gaps do to our software!
Ferrari
always cheers us up and we need it, after our diatribe over XEL. Something interesting is happening with Ferrari's share price, presumably in the hope of them doing well in Malaysia this weekend.
This situation now suggests anything above $51.6 will lead to $52.5 next as a major point of interest. The interesting thing, should the price close above $52.5, we're showing a clear track until $60.
We've circled recent movement gaps against this shares price. Unlike XEL above, we tend not to be too worried about this sort of thing from the USA, due to futures trading against NYSE shares. That's unless it's a massive gap - but in that case we're generally witnessing a game-change movement.
Some alarm would be justified with any retreat now below 'blue' (currently $49) as an initial $45 is expected, with secondary $43.
Like a red Ferrari pulled over by the police for speeding in a 30 zone, it's visually pleasing.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
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.