The last time we looked at DroneShield Ltd. (DRO:ASX; DRSHF:OTC), we had expected it to find support at the parabola shown on its 2-year chart below following a severe decline from its parabolic blowoff top in July.
It did find support, and a muted rally followed, but this rally turned out to be the B-wave of an A-B-C 3-wave correction / bear market, with the price breaching the support of the parabola to entering a less steep but still quite a severe downtrend that continued up until a few days ago.
Considering the sector that DroneShield is operating in, this decline has been extraordinarily severe, with the price dropping from AU$2.70 at its peak to about AU$0.65 a few days back.
The purpose of this update is to point out that the correction / bear market looks like it has run its course, and DroneShield now looks ready to begin a new bull market. even if it doesn't get past its July peak and only approaches it, it will still result in very good gains from here. It is thus interesting to note that during the last trading session in Sydney, DroneShield rose sharply on big volume of 27 million shares traded, according to Bloomberg — higher than what is shown on this chart and the highest upside volume since September.
The reason for this is the news that the company has just won a sizable end-of-year order. This high volume breakout is, therefore, believed to mark the start of a new bull market in the stock, and the marked buildup in upside volume in the US-traded stock over the past week or so is probably the precursor to a breakout thought likely to happen today.
This, therefore, looks like a good time to buy or add to positions in DroneShield.
DroneShield's website.
DroneShield Ltd. (DRO:ASX; DRSHF:OTC) closed at AU$0.75, US$0.44 on December 24, 2024 and December 26, 2024.
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- 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.
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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. 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 cannot be construed as a recommendation or solicitation to buy and sell securities.
