Painchek Ltd (ASX: PCK)

PCK develops pain assessment and pain management tools that can be integrated into smart devices. It uses artificial intelligence to assess the micro-facial features in pain. The company was listed in ASX on May 01, 2012. It holds a market capitalization of $61.11 million as of January 25, 2022.

Financial and Operational Updates: As per the update on December 22, 2021, PCK plans to enter into the Australian homecare market in association with MPS Connect, a medication services company based out of Australia. As per the investor presentation, the company claims 25-42% of hospital beds are occupied by people with dementia, providing growth potential for pain assessment tools in the elderly.  It currently has 11 partnerships in Australia for aged care, 4 in the UK, 4 in NZ, and one in Canada. The Australian market to boasts revenue opportunity of $5-10 million.

PCK is yet to enter into the commercialization phase. It relied upon government grants for its revenue in FY21. It had posted a net loss of $6.07 million in FY21 and posted a cash balance of $9.7 million in the quarter ending September 30, 2021.

Technical Analysis: After a long consolidation, PCK prices broke its crucial support of 21 and 50-period SMA on a daily chart. Volumes are also increasing with decreasing in prices that further indicating that fresh selling occurs in the stock. RSI (14-period) is hovering at ~42 which indicates that the prices are losing momentum. Immediate support levels are AUD 0.047 and AUD 0.044 while immediate resistance levels are AUD 0.056 and AUD 0.060.

As the company relied upon government grants with nil operating revenues and sizeable net losses, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.051 per share as of 25^th January 2022.

Daily Technical Chart – PCK

Source: REFINITIV

Note:  The green color line in the chart depicts RSI (14-period), while the blue color line shows 50-Period SMA and purple color line shows 21-Period SMA

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. 

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