This report is an updated version of the report released as on 4.30AM (GMT+10) Time in Sydney, Australia as on 13^th April 2022.

Compumedics Ltd. (ASX: CMP)

Compumedics Ltd. is an Australia-based manufacturer of medical devices. The Company primarily involved in the development of a technology in computer-based patient monitoring and diagnostic systems.

Technical Analysis: On a monthly chart, CMP prices are trading in a primary bearish trend and also trading near to its all-time lowest levels of AUD 0.250. Prices also broke its upward sloping trend line support and the prices are sustaining below the same from past two months. Moreover, the momentum oscillator RSI (14-period) is trading at ~37.41, indicating weak price momentum. An important support level for the stock, is placed at AUD 0.215 while the key resistance level is placed at AUD 0.330.

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.

Considering the company’s current price levels are trading at all-time low levels, and momentum indicator analysis, it is prudent to recommend a ‘Watch’ rating on this stock. The stock was analysed as per the closing price of AUD 0.270 per share on 12^th April 2022.

Monthly Technical Chart – CMP

Source: REFINITIV

CFOAM Limited (ASX: CFO)

CFOAM Limited provides a wide range of carbon products that are manufactured from coal, pitch, or lignin feedstock. Its products were used in a variety of industrial applications including aerospace tooling, blast protection systems, energy-absorbing building structures, exhaust systems, and amongst others. 

Insights on Cost of Production: CFO has commenced the DOE Project on January 1, 2021, with an aim to reduce production costs by 90%. The 24-month duration project has reached a significant milestone on December 8, 2021, with the installation of its proprietary 68’ long belt continuous kiln production capability at the Triadelphia facility. The DOE project intended to reduce manufacturing costs through a reduction in capital and labour costs. Besides, it also aims to considerably reduce the cycle time to manufacture carbon foam from weeks to hours.

Tabulated below the production cost trend:

H1FY22 Results Update: CFO posted a net loss of US$1.34 million in H1FY22 as compared to a net loss of US$1.72 million due drop in the cost of sales and finance costs offsetting an increase in repairs and maintenance costs and employee-related expenses. During the period, CFO received a grant of US$370.6k from the U.S. Department of Energy. Out of this, it had recognized other income of US$18.5k. On the balance sheet, CFO recorded a cash balance of US$367.4k as of December 31, 2021, as compared to US$1.10 million as of June 30, 2021. The decline was due to an increase in operating cash outflows and repayment of borrowings.

Management: Gary Steinepreis serves as the Non-Executive Chairman of CFOAM Limited. Dr. Rudy Olson is the General Manager and Chief Technology Officer. On November 11, 2021, CFOAM Limited appointed Mr. Neil Rinaldi as a Consultant in Corporate Strategy and Finance. 

Technical Analysis: On the weekly chart, CFO prices are trading in a primary downward trend making lower lows and lower highs patterns. Prices are currently consolidating in a range between AUD 0.010 and AUD 0.012. Prices are also trading below its 21-period SMA on a weekly chart that further supporting watch stance in the stock. Moreover, the momentum oscillator RSI (14-period) trading at ~41.33, further indicates that the stock is trading in a weak momentum. An important support level for the stock is placed at AUD 0.009 while the key resistance level is placed at AUD 0.012.

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.

Considering the aforesaid facts, depletion in the cash balance, and its current price levels trading in a primary downward trend, it is prudent to recommend a ‘Watch’ rating on this stock. The stock was analysed as per the closing price of AUD 0.010 per share on 12^th April 2022.

Weekly Technical Chart – CFO

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 previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and is subject to the factors discussed above.

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 the stock prices tend to find resistance when they are rising, and the uptrend may pause due to profit booking or selling interest. 

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 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.

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