Biotron Limited (ASX: BIT)

BIT is a biotechnology company, involved in the development and commercializing of small molecule products to treat various viral diseases in Australia. Its lead antiviral drug is BIT225, which is in Phase II clinical trials for the treatment of HIV-1 and hepatitis C virus infections. The company also develops a portfolio of preclinical antiviral drugs. The company was incorporated in 1999 and is based in North Ryde, Australia. The market capitalization stood at $35.79 million at $0.052 per share.

Financial & Operational Update – on 30^th July 2021, the company released its report on quarterly activities for the quarter ended on 30^th June 2021, stating testing of compounds with promising activity against SARS-CoV-2, the causative agent of COVID-19 in its initial phase of studies and animal models of disease. Further, the designs of its two clinical trials of the antiviral drug, BIT225 had been finalised and the documentation for ethics and regulatory approvals have been put ahead. Another outcome the company shared is on the progress of the design, synthesis, and testing of new compounds under its Hepatitis B program. BIT received a refund of $1.41 million as an R&D Tax Incentive for the FY 2019-20. On the financial front, the company did not record cash receipts from its customers for the straight 12 months ending on 30^th June 2021. To fund its further clinical trials and growth activities, the company increased its cash balances to $4.21 million for the quarter ending 30^th June 2021, from $3.82 million in the previous quarter ended on 31^st March 2021.

Technical Analysis- The stock showed an overall downtrend forming lower highs and lower lows, with few spikes in between and currently near the multi-year lows levels. The relative strength index is at 38.204, which is heading towards the lower end of the range and closer to the oversold territory, implying some more downside can be expected further from current levels. The 21 days simple moving average is hovering close to the stock price and placed above at $0.057, giving some more bearish signal to the stock price. The stock price is crawling downside and heading towards the multi-year lows, the support is placed at $0.045 levels. For the prices to regain the uptrend, a resistance of $0.066 needs to be taken off with strong volumes.  

Due to the lack of operating revenues, the risks associated with the clinical trials in terms of success rates and the regulatory changes, dependence on the grants and tax refunds, makes the business model unsustainable in the longer term. Hence, considering the declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.052, up by ~1.96%, as of 23^rd August 2021.

Daily Technical Chart – BIT

Source: REFINITIV

AD1 Holdings Limited (ASX: AD1)

AD1 is an Australian based software and technology solutions providing company that connects employers and job candidates directly to live job opportunities on employer websites in Australia. It also offers utility software and managed services. The company was incorporated in 2006 and is headquartered in Hawthorn, Australia. The market capitalization stood at $24.17 million at $0.040 per share.

Financial & Operational Updates – On 30^th July 2021, the company released its activities report for the quarter ending 30^th June 2021, stating the ApplyDirect signed a project with NSW Government on May 21 to further enhance its iworkforNSW career platform and mobile applications. The company added few prominent names to its portfolio such as Equiti Group, Australian Dental Industry Association, Murdoch’s Children Research Institute, Infrastructure NSW and ABC Connect. On the financial front, the cash receipts from customers declined to $1.28 million for the quarter ending June 2021 as compared to the $1.53 million for the quarter ending on 31^st March 2021. The declining operating revenues and increasing expenses, further lead to the drain on its cash reserves, which declined to $0.52 million for the quarter ending 30^th June 2021, from $1.31 million in the previous quarter ended on 31^st March 2021.

Technical Analysis- The stock gave a breakout around the lows of $0.010 levels and witnessed the strong vertical rally which cooled off eventually, printing the recent highs of $0.076, and entering into a zone of low volatility. The relative strength index shows 51.367, which is moving in the middle range of the zone and indicating a directionless trend front the current levels. The 21 days simple moving average is placed at $0.040, which is near the stock price, diluting the trend formation or continuation in the near term. Since the prices entered a low volatile zone, the support is found at $0.032, beyond which, the stock can experience fresh selling pressure. For the prices to resume a clear uptrend, the resistance of $0.048 should be taken off with strong volumes. Breaking either the support or the resistance can lead to a strong trend formation in the near term.

Due to declining operating revenues and cash balances, accompanied by lower volatile stock prices, which are prone to a sudden breakout, we give the stock the rating of ‘Avoid’ at the closing price of $0.040, as of 23^rd August 2021.

Daily Technical Chart – AD1

Source: REFINITIV

Antilles Gold Limited (ASX: AAU)

AAU is an Australian-based exploration company engaged in the evaluation, exploration and development of gold and silver properties. It primarily holds interest in the La Demajagua gold/silver project located on the Isle of Youth, Cuba. The company is based in Bowral, Australia and having the market capitalization stood at $19.43 million at $0.077 per share.

Financial & Operational Highlights – On 17^th August 2021, the company shared an update on its La Demajagua project in Cuba, stating the presence of high gold and silver deposits under the surface. The company to continue to explore the area with 15,000 meters drilling program and the final results to be arrived by September 2021. The company released its activities report for the quarter ending 30^th June 2021, stating that the projects in Cuba will be carried out through a joint venture with Minera La Victoria SA. For this purpose, AAU raised $3.2 million through its right issues in May 2021. The cash receipts from its customers declined marginally to US $51K for the quarter ending 30^th June 2021 as compared to the US $53K for the period ending 31^st March 2021. The company raised its cash balance to US $4.0 million for the quarter ending 30^th June 2021, from US $2.96 million in the previous quarter ended on 31^st March 2021.

Technical Analysis- The stock showed a gradual uptrend with a sudden spike printing the recent high of $0.113, and eventually sold off, giving a wide range between highs and lows, adding further volatility to its movement. The relative strength index is at 51.592, which is hovering in the middle range of the zone, eliminating clear trend formation or continuation from current levels. The 21 days simple moving average is hovering closer to the stock price at $0.076, which implies the lack of strong trend continuation from current levels. For the prices to find stable grounds, the support of $0.065 should be well respected and held firmly. Since the stock prices exhibit are declining and might see a dead cat bounce, hence the resistance can be plotted at lower levels of $0.089.

Due to the insignificant operating revenues, declining cash balance and declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.077, as of 23^rd August 2021.

Daily Technical Chart – AAU

Source: REFINITIV

MinRex Resources Limited - (ASX: MRR)

MRR is engaged in the exploration and development of mineral properties focused on gold and base metal projects in Western Australia. Its key projects are:  Marble Bar North, Marble Bar South, Daltons, and Bamboo Creek gold projects in the East Pilbara area of Western Australia; and the Deflector extended gold project situated at Gullewa in Western Australia. The company was incorporated in 2011 and is based in Perth, Australia, with a current market capitalization is $9.45 million, and a current price of $0.017 per share.

Financial & Operational Highlights – As per the exchange announcements shared on 23^rd August 2021, the company shared encouraging results from the drilling program carried out at its Wiles Gold Project, the presence of gold mineralisation for the samples collected. As mentioned in the quarterly activities report, its Sofala Gold Project further indicated positive updates as of a total 352,213 oz Au following JORC 2012 Resources at Spring Gully and Surface Hill projects. The company appointed Mr Pedro Kastellorizos as Chief Executive Officer intending to further enhance the expansion of its exploration program. On the financial front, the company did not record cash receipts from its customers for the past 12 months ending June 30, 2021. Its cash balances were decreased to $2.45 million, from $2.70 million posted in the previous quarter ended on 31^st March 2021.

Technical Analysis- The stock showed a gradual uptrend and spiked in October 2020, printing the highs of $0.054 and sold off immediately and entering into the downward trajectory to date. The relative strength index is at 40.690, which is drifting towards the oversold of the range, indicating that the carnage is not yet done with the stock prices, and bears are still in control. The 21 days simple moving average is placed above the stock price at $0.018, indicating a further downward movement from the current level.  The support is placed at $0.013, from where we can witness bargain hunting, whereas the resistance is placed at $0.022 levels. Breaking either side of the range will give a clear picture of the trend formation. 

Due to absence of revenue generating mines, exploration risks, volatile commodity prices, and declining cash balances along with sinking stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.017, as of 23^rd August 2021.

Daily Technical Chart – MRR

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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