Avanti Communications (AVN): Extended base could lead to 50p

Avanti Communications has been making some positive technical noises. That said, going for the underdog in a small-cap situation is not usually the way to go in this space.

Avanti Communications (AVN): Extended base could lead to 50p again

I have to admit that I am not really that fussed about the alleged negatives on the fundamental front for satellite communications group Avanti Communications, even if only through wishing to prove the bears wrong. As many of us will be aware, just scaring private investors out of an alleged negative stock can become a self fulfilling prophecy, because most of us would prefer to be safe rather than sorry. This then has a snowball effect as the company in question then finds it hard to raise cash and so the business model can be threatened. In the case of Avanti Communications it can be seen how there has been an extended bear run here on the daily chart. But at least over the near term we have had support coming in towards the 20p level ahead of the latest triangle break from June. The view at this point is that as little as an end of day close back above the 50 day moving average at 34.51p could be enough to deliver a retest of the 50p plus resistance of the post-August period. But it should be noted that only a sustained clearance of this zone would really inspire in terms of classing Avanti Communications as a bona fide recovery situation.