AIM Recovery Plays: Boohoo, Globo, Quadrise Fuels

Having reminded ourselves of the mantra of “small is beautiful” in terms of the stock market yesterday here on the Spreadbet Magazine blog, today we are diving deep within the AIM market looking for possible recovery plays.

Clearly, some of their potential will be determined by the overall state of leading stocks and geopolitical concerns, especially Greece. But of course we are aware that in this particular part of the stock market company-specific matters and the mood of retail investors tend to be paramount.

The stock to start off with here is Boohoo.com (BOO), where we are trading the wake of the massive unfilled gap to the downside from early January. Since then there has been higher support above 20p driven by an uptrend line in the RSI window currently running towards the 30 level. But the best news of all is the way that we have been treated to two decent end of day closes above the 50 day moving average at 25.29p, the type of price action which should be enough to trigger at least an intermediate recovery. The favoured upside over the next 4 to 6 weeks would be to fill the January gap/200 day moving average level at 39p, even if the shares fell away again after that. However, an end of day close back below the 50 day moving average is the suggested stop loss.

Next up is Globo (GBO) where we are witnessing a turnaround in terms of sentiment towards the company, which is starting to improve in tentative fashion, trailing the price action which could already be regarded as being in bull mode. This is said on the basis of the recent recovery of the 200 day moving average at 46p in the latter part of February, as well as the imminent golden cross buy signal between the 50 day/200 day moving averages as this week draws to an end. Another positive is the way that we have seen a rebound in the RSI window above the neutral 50 level to leave the oscillator at 65 – typically a decent leading indicator of the upside argument. The view currently is that while there is no end of day close back below the 20 day moving average at 50.65p, the next 2 to 3 months could see progress within a wide rising trend channel from May last year which is hinting at the target of 75p plus.

Quadrise Fuels (QFI) has been and remains a difficult customer on the basis of both the technicals and the fundamentals. But at least support for March to date looks be coming in at the floor of a falling trend channel from October/20 day moving average of 14.93. The added kicker in terms of the price action is the way that there has been an RSI bounce of the neutral 50 level at 57 currently.

All this would go to suggest that as little as an end of day close back above the initial March resistance and 19p would be enough to trigger an intermediate rally. The favoured destination at this point would be the top of a falling trend channel from October at 25p over the following 4-6 weeks. However, given the way that the shares have failed above the 50 day moving average and 17p on no less than four occasions so far this month, waiting for the buy trigger would now seem to be obligatory even for fans of this situation.