DUG Technology Limited (ASX: DUG)

DUG is an Australia-based technology company, offering high-performance computing as a service (HPCaaS), scientific data analysis services, and software solutions for the global technology and resource sectors. Its portfolio of services includes data services, geoscience services, seismic processing, full waveform inversion (FWI), depth imaging, petrophysical processing and interpretation, quantitative interpretation and regional velocity models. The Company’s offerings are delivered to the client through DUG McCloud platform. The current market capitalization is $97.48 million, and the current price is $0.920 per share.

Financial & Operational Updates –  On 7^th September 2021, the company announced it had completed $15 million of fundraising through the share placement, and the funding will be utilized for the Military and Space Business development, renewable initiatives, and working capital/ debt reduction. As per exchange filings on 31^st August 2021, the company signed a US$8.7 million binding heads of agreement with HODL Ranch Mining LLC for DUG McCloud, which is comprised of supplying the high-performance computing (HPC) infrastructure, that will be hosted in GUG’s Houston data centre as Skybox and deploy the GUG Cool immersion technology. On September 10, 2021, DUG announced Share Purchase Plan (SPP) giving an opportunity to eligible shareholders to apply for upto $30,000 worth of new shares. New shares will be offered at a price of $0.90 per share. The SPP is opened starting from September 10, 2021 until October 14, 2021.

On 31^st August 2021, the company released its FY21 results stating the revenue decreased to the US$41.4 million in FY21 as compared to the US $49.6 million in FY20, this further impacted the EBITDA, which declined to US $2.0 million in FY21. The Statutory Net Loss After Tax increased to US $15.7 million in FY21 as compared to a net loss of US $11.2 million in FY20. There has been a deferred revenue of US $2.1 million which will be recognised in FY22, also the deferred revenues had been increased by 8.6% in FY21.

Technical Analysis: The stock was in a downtrend till it bounced from the lows of $0.950 and printed the recent highs of $1.455 and again sold off, hitting the lifetime lows of $0.920. The relative strength index is at 28.527, which is an oversold territory, and the stock can experience a sharp pullback from nearby levels. The 21 days simple moving average is hovering above the stock price at $1.0960, indicating a further bearish trend from current levels.  The prices witnessed extreme wide ranges and the prices are at lifetime lows, hence placing the support on the charts is not viable. Still, with the help of technical indicators, we can consider $0.845 and $0.785 as the crucial support zone. The resistance is around $1.05 and the next final line of the selling zone is around $1.175.

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.

Though the revenues have decreased along with the decline in EBITDA and Net losses, but the capital raising with various expansion plans and strong reversals from the technical indicators suggest a reversal from the sinking prices. Considering the above facts, investors with 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 at $0.920, down by ~6.12%, as of the closing of 14th September 2021. However, the risk levels are extremely high in view of the weak fundamentals.

Daily Technical Chart – DUG

Source: REFINITIV

Imugene Limited (ASX: IMU)

IMU is an Australian-based clinical-stage immuno-oncology company, providing immunotherapies that activates the immune system in cancer patients to remove tumours. It was incorporated in 1986 with its base in Sydney, Australia, having a current market capitalization is $2.21 billion, and the current price is $0.40 per share. On 3^rd September 2021, IMU was added by S&P to the list of ASX 300 index.

Financial & Operational Updates – IMU announced on 1^st September 2021, HER-Vaxx Phase 2 Gastric cancer trial along with three trials in future. As per Appendix 4E, Net loss for FY21 is reported as $18.45 million as compared to a net loss of $10.51 million in FY20, contributing to an increase of losses by 75.6% Y-o-Y. Such an increase is majorly due to an increase in the clinical trial and research activities related expenditure. Cash at the end of FY21 is reported as $29.49 million Vs $30.11 million at the end of FY20. On 29^th July 2021, it raised a sum capital of $90 million, against issuing 300 million shares to investors.

Technical Analysis: The stock showed a gradual uptrend especially when the prices surpassed the $0.12 levels and then picked up pace towards reaching the recent highs of $0.495, and sold off from there. The relative strength index is at 60.48, which is sitting on the sidelines and giving no clear formation of trend formation or continuation from current levels. The 21 days simple moving average is hovering close to the stock price and placed below $0.362, indicating a possible temporary bullish trend, but here support and resistance come into play. The stock has declined since May 2021 levels and is currently in a low volatile zone, hence the support is placed near the current prices around $0.355 and similarly, the resistance is placed at $0.425 levels. Breaking either side of the mentioned levels can give a clear direction for the prices to follow.

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. 

Increasing losses, business operations getting hit from the COVID-19 crisis, and the rise in stock prices, warrants a double-check from investors to do financial investigations so that the price they pay should reflect the value they are getting. The technicals are not showing a favourable risk and reward in terms of support and resistance, hence it's suggested for the investors to ‘wait’ for the prices to correct near the support levels and the company to show a turnaround in its business by reducing its losses, before taking any investment actions. The stock was analysed at the closing price of  $0.40, down by ~1.235%, as of 14th September 2021.

Daily Technical Chart –  IMU

Source: REFINITIV

Province Resources Limited (ASX: PRL)

PRL is an Australian-based mineral exploration, dealing in copper, gold, nickel, cobalt, vanadium, and others. It was incorporated in 1933 with its base in Subiaco, Australia, having a current market capitalization is $175.09 million, and the current price is $0.160 per share.

Financial & Operational Updates – A drilling program is planned for targeting the continuation of nickel and copper anomalism at Gnama South. As per the announcement on 10^th September 2021, PRL got a license for holding environmental and other on-ground studies for its HyEnergy green hydrogen project. A grant of $0.3 million has been secured to evaluate the technical and commercial feasibility of the export of Green Hydrogen, from Western Australian Govt. (WA) and WA Renewable Hydrogen Fund Round 2. In addition, during the quarter period ending 30 June 2021, PRL secured $18 million equity from ESG and other institutional investors to advance HyEnergy Zero Carbon Hydrogen project. The company did not receive any cash receipts from its customers for the past 4 quarters straight, ending on 30^th June 2021.  The cash at the end of 4QFY21 is reported as $23.60 million as compared to $6.64 million for 3QFY21.

Technical Analysis: The stock gave a breakout from the lows of $0.025 and kept marching towards the North and printed the highs of $0.250 and sold off eventually forming lower lows and lower highs. The relative strength index is at 61.75, which is heading towards an overbought territory, and prices witness correction any time soon the more it approaches towards the range of 70 to 80 readings. The 21 days simple moving average is hovering close to the stock price and placed below $0.147, indicating a further bullish trend left for the prices from these levels. The stock has declined since April 2021 levels and is currently in a low volatile zone, hence the support is placed near the current prices around $0.130 and similarly, the resistance is placed at $0.180 levels. Breaking either side of the mentioned levels can give a clear direction for the prices to follow.

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. 

The lack of cash receipts from its customers for past four quarters, with negative ROE as compared to the Industry Median, and low volatile stock, which is prone to wild movement post-breakout. Taking the support and resistance mentioned above and deteriorating financials into considerations, it's suggested to ‘Wait’ for the stock prices to show an uptrend before taking investment actions at current levels of $0.165, up by ~6.451%, as of 14th September 2021.

Daily Technical Chart – PRL

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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