NZX Momentum Gainers- Pacific Edge and TruScreen

  • Jul 31, 2020 NZST
  • Team Kalkine
NZX Momentum Gainers- Pacific Edge and TruScreen

Summary

  • The major equity index, i.e., NZX 50 has posted a recovery of ~ 43.79 per cent since the onset of the second quarter.
  • The surge in the index is well supported by market sentiments, leading to a surge in many stocks on the exchange.
  • Out of many, Pacific Edge Limited (NZX:PEB), TruScreen Limited (NZX:TRU) have gained considerable momentum in the recent past and now developing some interesting developments on Charts.

The domestic market seems to be under a recovery mode with the underlying NZX 50 Index surging from the level of 8,209.04 (intraday low on 23 March 2020) to the present high of 11,803.93 (intraday high on 22 July 2020) to mark a price appreciation of ~ 43.79 per cent.

The recovery in the major index has been supported by market sentiments, and with a recovery in NZX 50 many stocks such as Pacific Edge Limited (NZX:PEB), TruScreen Limited (NZX:TRU) have gained considerable momentum in the recent past and now developing some interesting developments on Charts.

NZX-Listed Stocks Under Sentiment Splash

Pacific Edge Limited (NZX:PEB)

The Company has recently attracted growth capital at a market premium with an investment offer of AUD 22 million from ANZ New Zealand Investments, which is one of the largest third-party money manager with an AUM of $33 billion.

  • Under the investment offer, PEB would issue 33,846,154 shares to ANZ New Zealand Investments at face value of $0.65 a share, representing a 14 per cent premium over the last 5-day trading volume-weighted average price (as on 23 July 2020).
  • The investment from ANZ New Zealand Investments follows the achievement of significant commercial milestones by the Company in the United States, which include bagging of a Local Coverage Determination, enabling reimbursements for all Cxbladder tests performed for patients covered by the Centers for Medicare and Medicaid Services across the United States, that costs around USD 760 per test.

https://hotcopper.com.au/threads/ann-general-peb-peb-attracts-growth-capital-at-market-premium.5515069/

PEB On Charts

PEB Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

PEB Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On following the daily chart, it could be seen that the stock demonstrated a breakaway gap and gained a considerable momentum to trade above the 200-day exponential moving average and 50-day exponential moving average (EMA), reflecting on prevailing bullish sentiments.

  • Post witnessing a large breakaway gap of ~ 51.85 per cent on 6 July 2020; the stock marked a runaway gap of ~ 8.69 per cent on 27 July 2020 to give a volatility breakout with prices breaching the +2 Standard Deviation (or SD) of the 20-day simple Bollinger band.
  • The On Balance Volume also moved in tandem with the price rally, suggesting that the recent rush in the stock price was well supported with a surge in volumes.
  • However, while the stock is under an impression of a bull run and testing the +2 SD of the band, the 14-day Relative Strength Index has moved to the overbought zone, reflecting that the stock might witness some profit booking activities in the near-term.

PEB Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

PEB Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On further applying directional signals on the daily chart, it could be seen that the plus directional index (or DI) is trading above the minus DI, reflecting that the primary trend is an uptrend, and at present, bullish sentiments are prevailing.

  • The spread between plus DI and minus DI is also considerably large, which along with a positive signal from 12,24,9 MACD indicator, could further seed bullish sentiment in the medium-term.

TruScreen Limited (NZX:TRU)

The Company recently released its audited financial results for the year ended 31 March 2020 and reported a fall of 31 per cent in sales at $1.3 million.

  • Furthermore, the total revenue took a hit of 18 per cent against the previous period to stand at $2.55 million.
  • However, during the financial year 2020, the Company secured the approval of The Ministry of Health of the Vietnam Government for its cervical cancer screening device, and further suggested, that China remained the primary market during FY2020 with a screening population of ~ 400 million women and share of the Company’s total sales at 60 per cent.
  • TRU reported a decline of $2.2 million in total overhead expenses excluding impairment, amortisation and depreciation costs for the year.

https://www.nzx.com/announcements/355356

TRU on Charts

TRU Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

TRU Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On the daily chart, the stock has breached its short-term support line and is now trying to retest the breakdown, which should act as the primary resistance for the stock.

  • However, at present, the stock price has breached the +2 SD of the 20-day simple Bollinger band confirming a volatility breakout but was unable to sustain and plunged.
  • Moreover, the stock is presently trading above both 200-day and 50-day EMAs, reflecting that bullish sentiments prevail in the stock.
  • The primary support for the stock is at the middle line of the Bollinger band or the mean value, followed by crucial and decisive support at -2 SD of the band.
  • The -2 SD and the 200-day EMA are currently overlapping, which should act as decisive support or a point below which the current sentiment could change and vice versa.
  • The On Balance Volume is following the rise in the stock price, suggesting that the recent rush has been well supported with a surge in volume.
  • The 14-day RSI is currently above the mean value and well below the overbought zone, and if the stock successfully retests, breaks, and sustains above the resistance, it could seed further bullish sentiments while failure to do so could attract bears.

TRU Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

TRU Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On further applying directional signals, it could be seen that the plus DI and minus DI are largely separated and plus DI is trading above minus DI, confirming that the primary trend is an uptrend, and at present, bullish sentiments are dominating.

  • Furthermore, the 12,24,9 MACD indicator is also giving a positive signal with the signal line (blue) crossing the MACD line (red) from below.

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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