Can only go one way?

 XTEK Limited is a little known, poorly performing (at least for shareholders) company that has suddenly come into prominence following an upbeat CEO address from Brian Malcolm at yesterday’s (21 November 2013) Annual General Meeting.

He portrays the company as being forward-looking with a number of new products lines employing the latest technology.

It supplies defense, and security equipment to the police, and army together with explosive equipment to mining companies.

From being largely an importer of quality armaments, XTEK has now  developed a production capacity with a contract to supply the US army with a unique light weight armour product.

Technical analysis considerations

A Point and Figure chart has been selected which  shows how utterly this company has disappointed shareholders since it was floated in 2005. It has been in an unrelenting downtrend, with a recent rights issue at 2.7 cents, the fourth in successive years.

The lower of the two horizontal lines indicates resistance level at 5 cents. Should the price exceed 5 cents, it would create a buy signal.

The upper of the two horizontal lines shows the next resistance level at 14 cents.

Conclusion

This post is not a recommendation to purchase XTEK shares. Readers with an interest in this company should undertake their own research and seek advice from their financial adviser, taking into account their risk profile.

From a purely technical perspective, entry could be planned if the share-price were to exceed 5 cents with an initial target of 12-14 cents. A possible stop/loss position could be set at 2.7 cents.

Reference

http://www.canberratimes.com.au/business/body-armour-supplier-hits-world-target-20131014-2vj2z.html

Categories: Business, Chart Analyses, Trading opinion

Tags: Point and figure chart, Technical analysis