Calidus Resources Limited (ASX: CAI)

CAI is a gold exploration and development company in Australia and has two major projects: Warrawoona Gold Project and Blue Spec Project. The current market capitalization as of 21^st September 2021 stood at $217.96 million, trading at a stock price of $0.55 per share.

Financial & Operational Updates – As per the announcement on 14^th September 2021, Macmahon finalizes a $210 million mining contract with the company. Further, the company reported strong progress in the construction of the Warrawoona Gold Project, which is ~60% complete and the company aims to start the first production in the June Quarter of FY22. Meanwhile, on 9 September 2021, the company completed four diamond holes drill as part of the Spec Feasibility study (DFS). As per the release dated 21 July 2021, the company had $27.3 million cash, $85.0 million in loan facilities with $350k in listed investments as of 30 June 2021. For FY21, the company generated no revenue versus $0.36 million revenue in FY20. Therefore, the total comprehensive loss attributable to the company stood at $4.78 million in FY21 versus $2.09 million in FY20.

Technical Analysis: CAI’s price started to move upside after making a low of $.375 in April 2021 and currently, hovering around resistance turned support level $0.545 for the past one month. On the daily chart, the CMP still hasn’t surpassed the 21-period SMA, placed at $0.588, implying uncertainty about future direction. The momentum oscillator RSI (14-period) is in the mid-range at ~52.89 level, therefore giving no clear signal on the directions. On the higher side, $0.615 acting as an immediate resistance level for the stock and a breakout of this level might lead the prices up.

The company reported net losses and there was no revenue generation in FY21. Amid directionless signals and RSI level, on technical front, investing in this stock at such elevated prices reduces the margin of safety, hence it's suggested to ‘Watch’ and re-evaluate the stock once the prices approach the support & resistance levels. The stock was analyzed as per the closing price of $0.55 per share, up by ~0.917%, as of 21^st September 2021.

Daily Technical Chart – CAI

Source: REFINITIV

Nexion Group Limited (ASX: NNG)

Nexion Group Limited provides cutting-edge cloud solutions, network, security, and data centre services to enterprise customers and businesses. Two main components of NNG include Hybrid Cloud Infrastructure (NEXION OneCloud) and wide-area network (SD-WAN). The main market served includes Australia, New Zealand, Canada, South Africa, and Dubai. The current market capitalization as of 21^st September 2021 stood at $21.7 million and the share price of the stock stood at $0.205 per share.

Financial & Operational Updates – As per the preliminary final report for FY21, published on 31^st August 2021, revenue from ordinary activities was down by 43% Y-o-Y to $2.18 million in FY21. Further, the net losses increased ~273% Y-o-Y to $4.14 million in FY21 versus net losses of $1.23 million in FY20. Meanwhile, the cash at the end of FY21 was reported at $4.85 million versus $96.04k in FY20. Also, the company reported that it won the new business of $5.1 million in the first two months of FY22

Other Developments: On 16^th August 2021, NNG announced the finalization of its acquisition of Blue Sky Telecom Pty Ltd. for a cash consideration of $2 million. The target company delivered an un-audited $3.93 million revenue in FY21.

Technical Analysis: NNG price are consolidating in the range between $0.18-$0.255 from past 7 months. On a daily chart, prices are currently trading between 21-period SMA and 50-period SMA that indicates indecision in the stock. Whereas the RSI (14-period) is hovering in a mid-range territory at ~49.16 level that further indicates indecision in the stock. Immediate support levels are $0.18 and $0.165 while immediate resistance levels are $0.230 and $0.255.

After considering the company’s financial performance in FY21, support & resistance, and the RSI level, investing in this stock at such a price doesn’t seem prudent, hence it's suggested to ‘Watch’ until the financials improve. The stock was analyzed as per the closing price of $0.205 per share, up by ~5.128%, as of 21^st September 2021.

Daily Technical Chart – NNG

Source: REFINITIV

Todd River Resources Limited (ASX: TRT)

Incorporated in 2014, TRT holds base and is involved in precious metals projects (nickel-copper-PGE, gold mineralisation and zinc-copper), covering over 7500 sq. km in Western Australia and Northern territory. Its projects include Berkshire Valley Project, the Nanutarra Nickel Project, the Mount Hardy Project and others. Its market capitalization stood at $32.90 million as of September 21, 2021, at a stock price of $0.06 per share.

Financial & Operational Updates – As per the announcement on 31st August 2021, base metal and PGE geochemical anomalies were found in Berkshire Valley Project. As per August 2021 Investors Presentation, cash at the end of June quarter FY21 was reported as $6.45 million. In the same quarter, Boab Metals (BML) agreed to purchase 100% Manbarrum Zn-Pb-Ag Project for $0.5 million. The helps TRT to focus on capital allocation in projects in Western Australia and Northern Territory.

Technical Analysis: TRT’s price has been quite volatile in the recent past, and currently sustaining above an upward sloping trend line. On the weekly chart, the CMP is trading just below the trend-following indicator of 21-period SMA at $0.067. The momentum oscillator RSI (14-period) is trading in negative territory at 46.764 level, which indicates a directionless situation for TRT for the short-term period.

The company is yet to generate revenues. While on technical front, considering the support & resistance and the RSI, investing in this stock at such level brings uncertainty. Hence, it's suggested to ‘Watch’ for the support levels as well as any improvement reported in the operating activities. The stock was analysed as per the closing price of $0.060, up by ~1.694%, on 21^st September 2021.

Daily Technical Chart – TRT

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.

The Yellow colour line reflects the Trendline.

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