xReality Group Limited (ASX: XRG)

Incorporated in 2011, XRG creates virtual reality (VR), augment reality (AR), physical and digital simulation for the defense, consumer leisure and enterprise markets. It holds a market capitalization of AUD 17.17 million as of 23^rd December 2021.

Financial & Operational Updates – As per the announcement dated 14^h December 2021, its subsidiary Operator Tactical Solutions which focuses on military and law enforcements updated the following:

On 9^th December 2021, it announced an upcoming launch of first in-house virtual reality game by FREAK Entertainment and created by its recently acquired VR studio Red Cartel. It is supposed to roll out in 3QFY22. On 6^th December 2021, XRG formally changed its name from Indoor Skydive Australia Group Limited (ASX: IDZ).

As per its Quarterly Reports, it reported ~AUD 614k as its cash receipts and ~AUD 0.72 million used as cash outflow from operations. It closed its 1QFY22 with a cash balance at the end of 30^th September 2021 of ~AUD 0.82 million versus ~AUD 1.76 million at the end of 30^th June 2021.

Technical Analysis: On the weekly chart, XRG price witnessed a selling pressure from the higher level. Currently stock prices are hovering near the horizontal trendline support level and sustaining above the same. The momentum oscillator RSI (14-period) is trading at (~59.82 level), which indicates the possibility of rebound in the stock from the current levels. The prices are trading above the trend-following indicators 50-period SMA, which may act as a support level for the stock. An important support level for the stock is placed at AUD 0.039 while the key resistance level is placed at AUD 0.055.

Due to current price levels and operating cash outflow in the first quarter of FY22, investing in this stock at such uncertain levels should be taken with calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.0480 per share, down by ~5.883%, as of 23^rd December 2021.

Weekly Technical Chart – XRG

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 Yellow colour line represents the Trendline.

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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