Widecells hugely oversold and under recent placing price (WDC)

By Patricia Miller


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.


Author: Patricia Miller

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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