Clean Tech Chart Indicates 100%+ Rise
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Trade: High and Tight Flag (‘HTF’) that looks for 100%+ returns.
Company snapshot: Clean TeQ Holdings Limited (CLQ) is a solutions provider of water treatment, resource recovery and biological air purification technologies. CLQ focuses on Air Purification, Water Purification, and Resource Recovery products and services across Australia.
Theme Background: CLQ was a part of the strong clean-tech group earlier this year. The blue circle shows CLQ’s performance against the ASX Top 200 (XJO). We can see at the left side of the blue circle that CLQ had its strongest performance between May – June this year. This coincides with the clean tech companies’ strong performances as a group that we discussed in this market update and this article (Ep1).
Trade Criteria: the HTF pattern is highlighted in black. There are a few key attributes that HTF need to increase the chances of seeing 100%+ returns:
- Strong flag pole; the vertical black line shows the flag pole and needs to have a 75%+ rise. CLQ has more than a 500% rise which bodes well for a further 100% rise from today
- The flag pole needs to be rapid with little interruption in the rise. CLQ meets this requirement.
- After the strong rise in the flag pole, there needs to be a reduce in volatility, which can be seen by the black triangle highlighted on CLQ.
- When the share price breaks above the black triangle the movement should be a strong, pronounced movement with a significant increase in volume compared to the prior two weeks. CLQ shows this with yesterday’s isolated candle on the far right and the highlighted higher volume in the orange circle.
- Strong movements from companies in the same industry/sector/theme. While the theme was strong, the leader IFN has recently rolled over, so too has RFX and EDE. EMC is the last remaining ‘sister’ company that is performing reasonably well. Unless investors can identify new peers in a similar space to CLQ, the chances of a 100% rise reduce to some extent.
4/5 criteria is a good start. In my studies I have found that having that support of sister companies doubles the likelihood of this chart pattern returning 100%+.
Definitely a trade to watch and only something for the fast-paced rapid trader.
Note: this is not personal advice, conduct your own research and consult your broker to see if this trade is suitable for your own circumstances. If you like would my assistance on this or any other trade matter, just email me at Christopher.Hall@springfg.com.
Christopher is head of equites at Spring Financial Group. Christopher has over 10 years' experience managing equities desks with thousands of retail clients and responsibility for maintaining and servicing retail and wholesale relationships.