BrainChip Holdings Ltd (ASX: BRN)

BRN is engaged in the development of software and hardware-accelerated solutions designed for artificial intelligence and machine learning applications. It’s Akido Neuromorphic Processor helps to provide vision, audio, olfactory, and smart transducer applications. BRN is ASK listed on November 09, 2011. It holds a market capitalization of $2.37 billion as of January 28, 2022.

Financial & Operational Update: As per the quarterly activities report released on January 27, 2022, BRN was granted three patents and completed production testing of Akida technology. It also signed a license agreement with MegaChips. The company intends to launch commercialization of Akida with a go-to-market strategy and ramp up additional sales and marketing teams.

It had appointed Mr. Sean Hehir as Chief Executive Officer on November 15, 2021. It had issued American Depository Receipts (ADRs) on November 03, 2021, under the ticker ‘BCHPY’ that represents 40 BRN shares in ASX. The company amended its Put Option Agreement with LDA Capital LLC to defer the remaining $5.3 million draw-down obligations.

For the full year ending December 31, 2021, BRN realized $2.52 million from customers as cash receipts and posted operating cash outflows of $14.27 million. It had closed the period with a cash balance of $19.37 million.

Technical Analysis: BRN stock prices are sustaining above the horizontal trend line support level at AUD 1.29 and continuously taking support of the same. The leading indicator RSI (14-period) is trading at ~54.04 level, indicating bullish momentum. Further, the prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, which may act as a support level. An important support level for the stock is placed at AUD 1.10 while the key resistance level is placed at AUD 1.68.

While incorporating the support and resistance in analysing the investment opportunity, the investors with a high-risk appetite might consider a ‘Speculative Buy’ position on this scrip considering the launch of ADRs, new patents, and licensing agreement with MegaChips. The stock was analysed as per the current market price of AUD 1.360, as of 28^th January 2022, 11:54 AM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high considering the operating cash outflows and the risk of technological advancements.

Daily Technical Chart – BRN

Source: REFINITIV 

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

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 analysis has been achieved and is subject to the factors discussed above alongside support levels provided.

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.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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