Phoslock Environmental Technologies Limited (ASX: PET) is in the business of cleaning the environment on a global scale through its specialised engineering solutions and water treatment products. The company also owns a patent named PHOSLOCK, which is an innovative water treatment solution, permanently binding excess phosphorus in the water column and sediments.
On 3rd June 2019, the company announced that the Science and Technology Promotion centre, which is a division of Ministry of Water Resources of the People’s Republic of China has successfully recognised PHOSLOCK.
Further, PHOSLOCK, which is used for the water treatment and helps in the removal of phosphorus had been recognised in the 2019 official guide as a product of advanced practical technology under the category of water conservation and remediation.
This recognition is very important for the company and marks a major milestone for PET. It will also help the company in marketing of the products and services across China and on a global scale.
Mr Laurence Freedman AM, Chairman of the company stated that the recognition for the flagship products automatically speaks a lot about the hard work of the company and Chinese partners to secure this status in a short duration of time.
On 31st May 2019, the company announced updates on production & raw material procurement.
On the daily chart, the stock price had been in a consolidation zone for a long period of time. In fact, this range bound trend lasted for about a year. During the consolidation phase, the market participants were unable to decide on the direction of the trend, and hence, the stock price action was lacklustre for a year.
This kind of price action at the top of the trend generally depicts two things, either the prior uptrend has been exhausted, and a new down move could initiate from here. Another probability is that the trend might just have halted and is soon set to continue.
On 23rd May 2019, Phoslocke stock broke on the upside with massive force. The price breakout was backed by the company’s exceptional results from Chinese Lake project and the breakout was supported by huge volume. Both technical and fundamental aspects played their part, and the result is seen on the chart.
Daily Price Chart of Phoslock (Source: Thomson Reuters)
The breakout was accompanied by a huge volume of more than 9.62 million in a single day. This was way more than the previous day’s volume (before the breakout) of 421.7k.
Currently, the stock is in a strong uptrend, however the price action is witnessing fatigue. From the past two days, the stock has consecutively made lower highs, which states selling pressure and the stock may correct. Healthy price action calls for a price correction post a massive price rally as witnessed in the case of PET.
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