Widecells Group (LSE:WDC) has seen its share price slip below the recent placing price of 3p. We have covered the company before highlighting the potential upside the story offers to investors after a number of mishaps – largely relating to funding – had decimated the share price. Let us not forget, Widecells hit highs of over 16p just seven months ago and finds itself at a lowly 2.5p today. The business plan narrative hasn’t changed, but after a number of setbacks, it’s time for Widecells to deliver results.
Should the company turn sentiment around and deliver on its aims, the share price chart offers a wealth of unabated upside potential after such a catastrophic fall. For starters, there is two obvious gap fills, one to 4p, the other to 9.5p. Don’t ask me why there’s a need for the price to go back and fill gaps – it’s one of trading’s great mysteries – but most do actually get filled!
I have indicated an initial target around 4p, offering 60% upside from today’s price. This zone fills the first gap, and a move around here might well coincide with that potential diagonal resistance line (dotted). With little evidence of any firm resistance all the way up to 10p, I’m simply looking for a point that may end up triggering a brief retrace – it’s rare things go up in a straight line.
On company success though, the potential fundamentals could easily see a rerate back into double figures. Once the gap to 9.5p is filled, first horizontal resistance can be found around 11.5p. Needless to say, after such a torrid time, the Relative Strength Index (RSI) is feeling very oversold.
Author: Stuart Langelaan
Disclosure: The Author owns shares in the company mentioned above.