In the last update on DroneShield Ltd. (DRO:ASX; DRSHF:OTC) we had not expected it to react back as far as it did, believing that the support at A$0.20 would hold. It didn’t, which may be largely due to adverse conditions afflicting markets generally at the time.
However, the fundamentals of the company have continued to improve at an ever more rapid rate, with the company CEO stating “We believe that we are now at an inflection point with a number of high profile customers, with the next step being regular multi-million dollar orders, which we expect to commence through 2H22.” and clearly, you can’t ask for much more than that.
With this prospect, it’s a small wonder that the stock broke higher on Friday.
On the latest one-year chart we can see that, after breaching the support level at A$0.20 in June, the stock tracked sideways in a narrow rectangular trading range between the failed support at A$0.20 that became resistance and the strong support a little lower down at about A$0.17.
Volume became light as the stock marked time in this range waiting for the 50-day moving average to drop down close to the price and for the fundamentals to continue improving.
The volume buildup at the end of July telegraphed an impending upside breakout that occurred on Friday. Given the now excellent outlook for orders and earnings, only helped of course by the deteriorating situation in Taiwan, this move is believed the mark the start of a major uptrend, so there is much more to go for.
The long-term six-year chart shows us that, apart from a couple of sharp runups, one at the end of 2016 going into 2017, and another in the middle of 2019, Droneshield has basically been tracking sideways.
Now, with the outlook for orders and earnings improving dramatically, it is clear that there is everything to go for here as the stock has barely moved yet.
The outlook for Droneshield could scarcely be better, so we stay long and this is a good point to make fresh purchases or add to positions. The stock is rather thinly traded on the US OTC market where limit orders should always be employed, although volumes should pick up as the price rises.
Droneshield website
Droneshield Ltd. closed at A$0.21, $0.17 on August 5th, 2022.
Want to be the first to know about interesting Technology investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
Subscribe
CliveMaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
Disclosures
1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with DroneShield Ltd. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd., a company mentioned in this article.
