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Highlights

  • Veem Limited is a capital goods company that designs and manufactures marine propulsion and stabilisation systems for the luxury motor yacht.
  • In H1FY23, its defence sales increased by 18% to AUD 8.1 million.
  • On a year-to-date basis, VEE shares are down 19.1%.

Veem Limited (ASX: VEE), a capital goods company that designs and manufactures marine propulsion and stabilisation systems for the luxury motor yacht and defence industries worldwide, ended on a flat note on Monday, 22 May 2023, after witnessing some rebound last week. On Monday, the stock closed at AUD 0.445.

On a year-to-date basis, VEE shares are down 19.1% despite last week's price action. This correction in VEE shares was witnessed despite any negative news flow from the company. In fact, the company reported good numbers for the half-year ended 31 December 2022.

Its revenue increased by 4% over 1HFY22 to AUD 27.4 million, while its net profit rose to AUD 1.8 million from AUD 0.3 million in the previous corresponding period. In H1FY23, its defence sales increased by 18% to AUD 8.1 million.

But VEE shares are yet to witness any significant buying interest since the announcement of its 1HFY23 earnings, although the stock surged nearly 5% on the day of its 1HFY23 earnings announcement on 23 February 2023.

A study of VEE’s price chart reveals there is a possibility of a short-term rebound in the capital goods stock. Here’s what VEE price chart suggests.

VEE’s Technical Analysis:

On the daily chart, VEE's stock price is trading near the lower boundary of a symmetrical triangle pattern; simultaneously, the stock is also forming a positive divergence relative to the RSI (14-period), indicating the possibility of an upside movement. In addition, the RSI (14-period) is moving north from the oversold region, which supports the positive bias. However, prices are trading below the 21-period and 50-period SMAs, which may act as the resistance levels for the stock; in contrast, the stock's recent low may act as a support. Important support for the stock is positioned at AUD 0.370, while key resistance is located at AUD 0.495.

Daily Technical Chart – VEE

The technical levels for the stock were evaluated as per the closing price of AUD 0.445 per share as on 22 May 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock, and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ Yellow colour line represents the Trendline.

The Purple colour line in the chart's lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.