Aeris Environmental Limited (ASX: AEI)

AEI is engaged in the R&D and commercialization of its proprietary technologies. AEI markets disinfectant products that provide HVAC/R hygiene technology and anti-corrosion services. Its market capitalization stood at ~AUD 17.56 million as of 1^st April 2022.

Key Business and Financial Updates for H1FY22: On 28 March 2022, AEI appointed Mr. Andrew Just as the new Chief Executive Officer (CEO). During the period, AEI registered $1.755 million in revenue from company activities (H1FY21: $5.206 million). Sales during the period were significantly affected by COVID-19 shutdowns in southeast Asia, Australia, and other regions in the northern hemisphere. Cash receipts for the period stood at $2.349 million (H1FY21: $8.119 million). The company initiated a broad review to assess a spectrum of initiatives for AEI, with a comprehensive strategic overview of its commercial, marketing, and technical activities.

Technical Analysis: On the daily chart, AEI price witnessed a breakout of a downward sloping trendline at AUD 0.063 level (on March 28, 2022). Since the breakout, prices are sustaining above the falling trendline, which indicates bulls are in action. Moreover, the prices are trading above the trend-following indicator 21-period SMA, which may act as a support level. Further, the momentum oscillator RSI (14-period) is trading at ~62.16 level, indicating positive momentum. An important support level for the stock, is placed at AUD 0.065 while the key resistance level is placed at AUD 0.082.

Considering the current trading levels, positive RSI momentum and key risks associated with the business, we recommend a ‘Speculative Buy’ on the stock at the closing market price of $0.072, as on 1^st April 2022. Investors with a high-risk appetite can consider entering the stock because the risk levels are high considering the volatile market risks and business-related commodity price fluctuations risks. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

AEI Daily Technical Chart, Data Source: REFINITIV 

Neuren Pharmaceuticals Limited (ASX: NEU)

NEU is a biopharmaceutical company engaged in developing drugs for neurological disorders. The company develops therapies for brain injury, neurodevelopmental and neurodegenerative disorders. As of 01 April 2022, the company clocked a ~AUD 513.28 million market capitalization.

Material Business Update: As announced on 25 March 2022, NEU received approval from the US Food and Drug Administration (FDA) to commence the Phase 2 trial of NNZ-2591 in Pitt Hopkins syndrome (PTHS). As per the 23 March 2022 announcement, NEU received approval from the US FDA to commence with the Phase 2 trial of NNZ-2591 in Phelan-McDermid syndrome. On 11 March 2022, NEU received approval from the Human Research Ethics Committee regarding the Phase 2 clinical trial of NNZ-2591 in Angelman syndrome.

Key Financial Update for FY21: NEU registered a revenue of $3.636 million, up by 277% YoY and reported a loss after tax of $7.79 million relative to a loss of $9.19 million in FY20. This was primarily attributed to the grant of $3.2 million received from the R&D Tax Incentive after the AusIndustry’s approval in the matter of Advance and Overseas finding for NNZ-2591 development as a novel therapy neurodevelopmental disorder. As of 31 December 2022, the company inked a cash balance of $36.78 million (31 December 2020: $24.188 million).

Technical Analysis: On the daily chart, NEU prices are trading below the rising trend line breakout level and facing the resistance of the trendline. Moreover, prices are trading below the trend-following indicator 21-period SMA, which may act as a crucial resistance zone. The momentum oscillator RSI (14-period) is trading at ~46.06 level, indicating negative momentum. An important support level for the stock, is placed at AUD 3.680 while the key resistance level is placed at AUD 4.200.

Considering net losses in FY22 and current price trading at higher levels, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 3.940 per share, down by ~1.006%, as of 1^st April 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

NEU Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and is subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

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

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