Paladin Energy Ltd. (ASX: PDN)

PDN was incorporated in 1993 and is based in Perth, Australia. The company is engaged in the development and operation of uranium mines across Australia, Canada, and Africa and its flagship project is the Langer Heinrich mine located in the Namib Desert in Namibia.

Fundamental Highlights- The company recently raised US $218.7 million via Institutional equity placement and on a pro-rata basis to repay the complete outstanding senior secured notes standing on its book. The company failed to record any receipts from customers for the three straight quarters ending on 31^st March 2021. There was an increase in net cash outflows from operating activities to over six times in 31^st March 2021 to US $2.12 million as compared to the US $0.32 million for the previous quarter ending on 31^st Dec 2020. The company increased its cash balance in its books by over five times to US $168.4 million on 31^st March 2021. It should be noted that the net loss for the 1H FY21 was US $25.4 million.

Technical Analysis- The stock witnessed a seamless upside movement starting Nov 20220 till it printed $0.60 and corrected slightly from there. The Relative Strength Index is pointing at 45.90 which is in the middle range, not pointing towards any stronger trend on either side. The 21 Days Simple Move Average is at $0.4960 which is hovering near the closing of the stock prices, not indicating any clear trend from the current levels. The support is placed at $0.43 from where the buying can emerge to sustain the uptrend. The resistance is at $0.535 and $0.60 which can be taken off the charts when accompanied by strong volumes.

With the lack of operating income, accumulating losses, and surging stock prices, we suggest investors to ‘Avoid’ the stock at the closing price of $0.4850, down by 1.021% as of 12^th July 2021.

Daily Technical Chart - PDN

Source: REFINITIV

Droneshield Limited - (ASX: DRO)

DRO is an Australian-based publicly listed company with its head office in Sydney and teams in the US and the UK. The company specialized in Radio Frequency Sensing, Artificial Intelligence and Machine Learning, Sensors Fusion, Electronic Warfare, Rapid Prototype, and MIL-SPEC manufacturing.

Fundamental Highlights- During 2H FY21, the cash receipts from customers clocked to an all-time high of $7.4 million. DRO is actively following up the potential orders from Middle East clients along with others comprising $200 million overall in potential worth. The company closed the period with a cash balance of $14.25 million as of June 2021 as compared to $13.62 million posted as on March 2021.

Technical Analysis- The stock has formed lower highs and lower lows, and in a range-bound manner failing to break on either side of the trend. The Relative strength index is showing 59.92 which is in the middle zone, amidst the narrow price range of the stock. The 21 Days Simple Moving average is $0.1593 which is above the current stock price, indicating the uptrend in the near term. The support of the stock is at $0.15, and resistance is placed at $0.195 which needs to be breached in a more convincing fashion to sustain the trend formation.  

The company posted a lifetime increase in cash receipts during the recent period, but the share price is still in the range-bound, and with a lack of any fresh triggers to take the stock to the upside, we suggest investors to ‘Avoid’ the stock at the closing price of $0.170, up by 3.03% as of 12^th July 2021.

Daily Technical Chart - DRO

Source: REFINITIV

Sabre Resources Limited- (ASX: SBR)

SBR was incorporated in 1986 and s based in West Perth, Australia. The company is engaged in the exploration and development of mineral properties across Australia and Namibia. The exploration projects are mainly for copper, lead, zinc, nickel, gold, and silver. 

Fundamental Highlights- The company recently announced the commencement of its Nickel and Copper exploration at its Bay Nickle Project, containing 99,200 tonnes of Nickle and 21,700 tonnes of copper where the price of Nickel is US $ 16,001 a tonne and Copper US $8.768 a tonne. There were no cash receipts from the customers for the quarter ending on 31^st March 2021 and a cash balance stood at $5.25 million, broadly unchanged from the previous quarter ending on 31^st Dec 2020. It should be mentioned that the company incurred a loss for the 1H FY21 which had increased to $3.16 million from the loss of $0.51 million on 1H FY20.

Technical Analysis- The stock has been on a continuous falling spree and reached the near-record lows of $0.004. The Relative Strength Index is 49.04 which is at the middle range of the trading zone, signalling an unambiguous picture of the current prevailing in the market. The 21 Days Simple Moving average is $0.004, which is in tandem with the stock price, lacking a clear direction. The prices are close to lifetime low hence the support is placed at lows of $0.001 and the resistance is at $0.009 which could be touched in the event of the reversal of the oversold zone as per technical patterns. The charts lack any strong upside move in the near term.

With the lack of operating income, accumulating losses, and falling stock prices, we suggest investors to ‘Avoid’ the stock at the closing price of $0.005 as of 12^th July 2021.

Daily Technical Chart - SBR

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 Valuation has been achieved and 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-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. 

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

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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