IODM Limited (ASX: IOD)

IOD is a technology solution-based company providing cloud-based software services in Australia. The company develops an automated debtor management solution that provides accounts receivable monitoring and collection management tools through a central cloud-based platform for businesses. The company was founded in 2008 and is based in South Melbourne, Australia. The current market capitalization is $220.19 million, and the current price is $0.375 per share.

Financial & Operational Updates – as per the exchange announcement of 5^th August 2021, the company entered the partnership with a UK based education client: Western Union Business Solutions and estimating an annual revenue between the range of $4654k- $780k, depending upon the students getting enrolled. Recently the company released its financial results for the FY21, stating a significant increase in revenue by 33% to $0.86 million as compared to the revenues of $0.64 million in FY20, resulting from an organic growth. The net losses were reduced by 9% to $2.2 million in FY21 from the losses of $2.4 million in FY20, due to the support from the government. The cash receipts also increased by one-third to $1 million in FY21 from $0.75 million in FY20.  The cash balances stood at $651k in FY21, with no dividend to its shareholders for the same period.

Technical Analysis: The stock was in a downtrend till it touched the lifetime lows around $0.005 and showed a strong uptrend, spiking at various instances, adding volatility for the investors to handle. The relative strength index is at 73.531, which is an overbought territory, implying some short-term correction anytime soon. The 21 days simple moving average is hovering close to the stock price and placed below $0.326, indicating a more bearish trend. The stock has made a strong run towards the North recently and is near the recent highs of $0.40, increasing the support levels in the range of $0.245 till $0.175, around which we can see some buying interest coming up. The resistance is at $0.48, which can hold the prices to cross further.

Though the revenues have increased, but the losses still exist at close to 3x of the revenues, however, the stock prices made a strong upwards rally, defying fundamental weakness and losses on the books. Investing in this stock at such elevated prices reduces the margin of safety, hence a ‘Watch’ stance is suggested till the prices approach the support levels and the company shows improvement in its bottom line. The stock was analysed as per the closing price of $0.375, down by ~2.598%, on 9^th September 2021.

Daily Technical Chart – IOD

Source: REFINITIV

Vimy Resources Limited (ASX: VMY)

VMY is an Australia-based exploration and evaluation company, engaged in the exploration and evaluation of the Mulga Rock Project. The Mulga Rock Project includes undeveloped uranium resources. The Company has 17 tenements that relate to the Mulga Rock Project, of which two are mining leases, six are exploration licenses, six are prospecting licenses and three are miscellaneous licenses. The current market capitalization is $184.0 million, and the current price is $0.170 per share.

Financial & Operational Highlights – On 6^th September 2021, the company announced positive updates on its Mulga Rock project stating the preliminary ion-test work indicates improved uranium recoveries, thereby reducing the operating costs from higher uranium loadings. Further, on 30^th August 2021, as per the exchange filings, the group shared that its Managing Director and CEO Mike Young decided to step down from the post ad for the time being Mr Steven Michael will be acting as an Interim CEO. Off late the company announced its quarterly activities report for the quarter ending June 2021, stating there were no cash receipts from the customers for the 4 quarters straight ending on 30^th June 2021. To fund its projects and expansion strategies through new projects, the company raised $27.5 million in equity through the Share Purchase Plan. The cash balances for the 4Q ending on 30^th June 2021 stood at $24.06 million which is significantly improved from $1.95 million in March 2021.

Technical Analysis- The stock was in a downtrend till it bounced from the lows of $0.020 and moving gradually upside unless the sudden spikes raised the interest among the trading and investing community. The relative strength index is at 71.030 which is already in an overbought zone and can witness correction any time soon the more it crawls towards the upper end of the range. The 21 days simple moving average is placed below the stock price of $0.125, implying a more bullish trend to the stock prices, considering the lagging behaviour of the Moving Averaging.  Since the prices have spiked lately, the support is coming in a range between $0.14 and $0.095. The resistance for the stock is coming around $0.21 and the next level is plotted at $0.275 and next could be discovered at $0.28.

Missing cash receipts from its customers, volatile commodity prices and highly volatile stock prices, devoid the rationale of investing at these levels. Unless the financial improves and the prices approach near the support levels, it is suggested to ‘Wait’ as per the risk and reward ratio at the closing price of $0.170, down by ~2.86%, as of 9^th September 2021.

Daily Technical Chart – VMY

Source: REFINITIV

Great Boulder Resources Limited (ASX: GBR)

Great Boulder Resources Limited is engaged in mineral exploration with a primary focus on the exploration, discovery, and delineation of gold deposits. The Company's key project - Balagundi Project is in the east of the Kalgoorlie Super Pit and the township of Kalgoorlie in the Eastern Goldfields District of Western Australia. Its Broadwood Project is located between the historical Binduli gold mining centre and the Golden Mile/Kalgoorlie Super Pit alongside the township of Kalgoorlie. The current market capitalization is $56.90 million, and the current price is $0.145 per share.

Financial & Operational Highlights – On 2^nd September 2021, the company announced positive updates on its 3 Phase of Reverse Circulation of Mulga Bill Project, stating a possibility of the high-grade potential of a million-ounce gold endowment. Also, its Diamond program is underway, as mentioned in the announcement on 20^th July 2021. On 12^th August 2021, the company shared a positive update on the Blue Poles project, the 18 RC holes were completed for a total of 2,545m. On 29^th July, the company announced its quarterly activities report for the quarter ending June 2021, stating the cash balance as $6.8 million in cash reserves at the end of June 2021 as compared to the $3.18 million on 31^st March 2021. Also, the company did not receive any cash receipts from its customers for the past 4 quarters straight, ending on 30^th June 2021.

Technical Analysis- The stock was in a downtrend till it bounced from the lows of $0.035 and recovering losses by moving towards the North and witnessing spikes at various instances. The relative strength index is at 62.198 which is heading towards an overbought zone, and it might witness some correction any time soon the more it marches towards the upper end of the range. The 21 days simple moving average is placed below the stock price of $0.1059, implying a more bullish trend to the stock prices, considering the lagging behaviour of the Moving Averaging, it should not be analysed in isolation.  Since the prices have spiked lately, the support is coming in a range between $0.105 and $0.075. The resistance for the stock is coming around $0.17 and the next level is plotted at $0.205.

Missing cash receipts from its customers, volatile commodity prices and the exorbitant movement witnessed in the stock prices lately, makes it difficult for taking any investment action. Investors with a high-risk appetite should ‘Watch’ and can consider the stock's support and resistance mentioned as a tool to incorporate in their analysis for making any investments in this company. The stock was analysed at the closing price of $0.145, down by ~9.376%, as of 9^th September 2021.

Daily Technical Chart – GBR

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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