Shares of EQTEC PLC (LON: EQT) recently broke out of the triangle pattern to the downside extending their year-to-date losses, but does this invalidate the bullish case?
The short answer to the above question is no; the company’s long-term fundamentals have not changed since we covered the stock in April. Hence, there are no apparent reasons to reverse our initial hypothesis on the stock.
The waste to energy gasification company has not made any new announcements to negate our positive assessment regarding its 2021 earnings and expected maiden annual profit.
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Eqtec still expects to book its first annual profit this year, finally hitting this crucial milestone that shall reward investors for believing in the company over the years.
We expected the price to break out of the triangle in either direction, so the downward break was not surprising. The stock then bounced off support which is still holding, and could see the share rise above the 2p level.
A break below the 1.63p support level would bring the 1.27p support level into focus, which has held since December 2020.
Eqtec shares have been in a downtrend since the start of 2021, and many investors would like to see the stock rally back to the 3p level where it was trading in January.
The downtrend reflects the broader selloff in green energy stocks since the start of the year amid a shift from growth stocks to value stocks.
We cannot predict when a new uptrend shall begin, but we need a major positive catalyst to trigger the next rally.
Eqtec share price.
Eqtec shares have broken out of the triangle pattern to the downside, but the bullish case is still supported.
Should you invest in EQTEC shares?
EQTEC shares are traded on the London stock exchange’s AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are EQTEC shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies