Recce Pharmaceuticals (ASX: RCE) surpasses 200-week moving average; what next?

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Recce Pharmaceuticals (ASX: RCE) surpasses 200-week moving average; what next?

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 Recce Pharmaceuticals (ASX: RCE) surpasses 200-week moving average; what next?
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Highlights:

  • Recce Pharmaceuticals shares rallied over 27% on Wednesday (22 June)
  • RCE shares had retraced almost 78.6% from its all-time high of AU$1.875, clocked in September 2020
  • RCE price took support of a falling trendline and the 78.6% level of the Fibonacci retracement

 Recce Pharmaceuticals Limited (ASX: RCE) shares witnessed a stellar rally on Wednesday (22 June), surging more than 27%. The stock outperformed some of its peers on Wednesday’s trading session, such as Wellfully Limited (ASX: WFL), which rose 7.99% and Incannex Healthcare Limited (ASX: IHL), which declined 4.16%.

Shares of the biotechnology company, engaged in the development and commercialisation of synthetic anti-infectives, saw a bearish trend in November 2020 and crashed more than 70% in the last 15 months. RCE prices retraced almost 78.6% from the all-time high of AU$1.875, clocked in September 2020. With Wednesday’s rally, RCE shares have crossed its 200-week simple moving average. Will the recent rebound in RCE shares continue? Let’s analyse the technical chart of RCE to get hints about its near term price movement.

Also Read: Anteris Technologies (ASX: AVR) up over 200% in a year: Is more steam left in the stock?

Analysis of Recce Pharmaceuticals price chart for short-term outlook

On the weekly chart, RCE prices took support of a falling trendline and the 78.6% Fibonacci retracement level simultaneously. The stock recovered sharply from the low of AU$0.55 marked on June 8, 2022 and formed a big green candle on the weekly chart. Now the stock is trading around its’ 2-month high levels and also surpassed the 200-week SMA. The recent upside movement in the stock was accompanied with increasing volumes as well, indicating higher market participation.

Watch

RCE weekly chart

As per the chart analysis, share price of RCE is approaching 21-period and 50-period SMA, so AU$1.00 may act as a near term resistance for the stock. If the stock sustain above the initial resistance, then AU$1.15 may act as a crucial resistance on the upside. On the other hand, important support levels are at AU$0.70 followed by AU$0.55, which may act as strong support for the stock on the down side. Summary of resistance and support are as below: 

RCE support/resistance

Technical Indicator Analysis (On the weekly chart)

The momentum oscillator RSI (14-period) recovered from an oversold zone and is currently showing a reading of around 47.99. Now the prices are trading above the 200-period SMA which may act as good support in the near term. However, the stock still trades below the trend-following indicators 21-period and 50-period SMA, which may act as resistance levels. Summary of technical indicators is as below:

After analysing the current price action and technical indicators, it can be said that Recce Pharmaceuticals Limited rebounded from the major support zone with the support of healthy volumes. If prices of the stock sustain around current levels then it may test the initial resistance. Meanwhile, on the lower side, if the prices of RCE move below the support levels, then it may witness some correction to the major support zone.

Also Read: Is short-term bottom in place for Pacific Smiles Group (ASX: PSQ) shares?

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