Vulcan Energy Resources Limited (ASX: VUL)

Vulcan Energy Resources Limited is engaged in geothermal energy and lithium exploration in Europe. As on 8^th October 2021, the market capitalisation of the company stood at $1.43 billion.

Financial and Operational Updates: Released on 7^th October 2021, the company announced that it would release 660,000 fully paid ordinary shares from voluntary escrow restrictions on 15^th October 2021. As per the announcement on 29^th September 2021, it inked an agreement with Infraserv towards Zero Carbon Lithium Project at its chemical plant located in Frankfurt. As announced on 27^th September 2021, the company successfully produced its first battery quality lithium hydroxide monohydrate (LHM) from the piloting operations. The company added that the sample had surpassed the traditional battery-grade LHM product, which includes best on the market battery grade specifications required from offtake customers, at >56.5% LiOH.H2O and very low impurities. Some of the notable developments include:

• On 24^th September 2021, the company opened its Share Purchase Plan (SPP), wherein it is targeting to raise about $20 million. The SPP is likely to close on 13^th October 2021.
• The SPP follows the previous $200 million placement, which was completed on 16^th September 2021.
• The company would use the proceeds, together with existing cash, to ramp up exploration initiatives and increase its dual renewable energy and lithium development strategy.

For the year ended 30^th June 2021, the company recorded a loss from continuing operations after income tax of ~$10.74 million against loss of ~$3.55 million in FY20. The company recorded net cash outflow from operating activities of ~$2.84 million in FY21 as compared to ~$1.33 million in FY20.

Technical Analysis: VUL price broke the downward sloping trend line by upside on 6^th September 2021 on a weekly chart, and since then, the prices are hovering above the breakout trend line four weeks. Prices are now getting correction from higher levels taking support of the same downward sloping trend line. RSI (14-period) is hovering at ~53.505 level that indicates the stock prices are trading in bullish momentum. Immediate support levels are $10.84 and $10.00, while immediate resistance levels are $12.43 and $14.40.

Investors can consider exiting from the stock if the Resistance levels mentioned as per the technical analysis have been achieved and are subject to the factors discussed above.

During FY21, the company reported a current ratio of 51.22x against the industry median of 1.63x, reflecting its decent capabilities to settle short-term obligations. In addition, VUL has nil debt-to-equity ratio, showcasing a strengthened balance sheet. On the technical front, considering RSI & 21 SMA levels, investors with a high-risk appetite might consider a ‘Speculative Buy’ position, incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the current price of $11.430 per share, as of 8^th October 2021, 03:29 PM (GMT+10), Sydney, Eastern Australia. However, the risk levels are high in view of the change in climate and disruptions in commodity prices.

Weekly Technical Chart – VUL

Source: REFINITIV

Argenica Therapeutics Limited (ASX: AGN)

AGN was incorporated on 20th November 2019, is a biotechnology company involved in developing, manufacturing and commercialisation of therapeutics drug named ARG-007 to protect the brain cells and reduce the deaths caused by stroke. Its market capitalization as of 8^th October 2021 stood at $29.26 million and the share price stood at $0.415 per share.

Financial & Operational Updates – On 30^th September 2021, it had announced partnership with the world’s leading clinic research institution – Linear Clinic Research to proceed with the preliminary work for Phase 1 clinical trial. In a significant milestone, AGN’s ARG-007 drug was scaled-up to GMP (Good Manufacturing Practice) of 99.9% purity as on September 14, 2021. As per the Annual Report released on 27^th August 2021, company is yet to commercialize its drug, but reported total income (R&D rebate and contributions) as ~$0.29 million in FY21 versus nil reported in last year. It had shown a ~169% of increase in Total Comprehensive Loss, stated as ~$1.03 million for FY21. Cash at the end of FY21 was reported as ~$7.14 million as of 30^th June 2021 versus ~$0.34 million in PcP. AGN raised a sum of $7.00 million through its IPO and commenced its trading journey on ASX on 9^th June 2021. It received a cash grant of $290k from MSWA in July 2021.

Technical Analysis: As stated in the above-mentioned announcement of its ASX listing on 9^th June 2021, due to lack of ample candlestick data from the given date, technical analysis is not applicable.

Besides being a novice to ASX, Argenica is still in its research phase and has a long way to reach the commercialisation of its drugs. The risk attached with the scrip seems to be on a higher side and can be put in a category of highly volatile stocks, therefore, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.415 per share, up by ~3.750%, as of 8^th October 2021.

Daily Technical Chart – AGN

Source: REFINITIV

Amplia Therapeutics Limited (ASX: ATX)

ATX was incorporated in 2013, is a clinical-stage drug development Australian company. It uses Focal Adhesion Kinase (FAK) inhibitors as a candidate drug to treat cancer and fibrotic diseases. Its market capitalization stood at $26.83 million as of 8^th October 2021, at the stock price of $0.205 per share.

Financial & Operational Updates – On 1^st October 2021, ATX appointed Mr. Hamish George as a Chief Financial Officer effective immediately. It had announced the publication of a key paper from Garvan Institute of Medical Research about Phase 2 clinical trial of pancreatic cancer patients and potential benefits of FAK inhibitor. As per the Proactive Report Investors Lifesciences Presentation conducted on 28^th September 2021, the company mentioned that its Phase 1 of AMP945 got over with 56 volunteers with excellent safety and tolerability profile. Whereas Phase 2 is planned for Q1 for FY22, for which $3.8 million was raised through new shares issue, existing shareholders like Platinum and Blueflag and new institutional investors like Acorn Capital. As per the Annual Report released on 23^stJuly 2021 for financial year ending on 31^st March 2021, ATX reported an increase in total operating income from ~$0.34 million in FY20 to ~$1.59 million in FY21. Total Comprehensive Loss, stated as ~$2.28 million for FY21, as compared to loss of ~$2.21 in FY20. Cash at the end of FY21 was reported as ~$1.84 million as of 30^th June 2021 versus ~$1.10 million in PcP.

Technical Analysis: ATX's prices have been consolidating in a wide range of $0.160 to $0.370 for the past one year. On a weekly chart, the stock prices are trading below 21-period SMA and 50-period which may act as a crucial resistance zone for near term. The momentum oscillator RSI (14-period) is trading at ~45.768 level, which indicates indecisive momentum for the stock.  An immediate support level is $0.180, while immediate resistance is found at $0.225, respectively.

Considering its cash burn rate against the pace of its revenue generation from operations, ATX has a long way to go. On technical front, considering its uncertain momentum, investing in this stock at current levels should be executed with a cautious approach, therefore a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.205 per share, down by ~4.652%, as of 8^th October 2021.

Weekly Technical Chart – ATX

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 Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-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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