Challenger Acquisitions: Above 50 day line could target 8p

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Challenger Acquisitions: Above 50 day line could target 8p

Having interviewed the CEO of Challenger Acquisitions (LON:CHAL) a couple of times, and having liked the concept behind the company, it is good to see the first stirrings of recovery for the stock price.

I note today on Twitter that some of the traders who normally know what they are doing are backing Challenger Acquisitions as a recovery play. This is encouraging given the way that the company announced earlier this month that its convertible debt holders have allowed it some breathing space to rejig its finances.

The attractions builder is clearly in an area where large amounts of cash are required, with the share price trajectory of the past year and a half underlining the notion that things may not have been proceeding in a satisfactory fashion. However, since the improved financial position was announced on 8th May we have seen a tentative rebound for the stock, a point underlined by the sharp jump in the RSI indicator reading from ultra oversold levels in March. This along with the latest bear trap rebound from below the former March support offers aggressive traders a buying opportunity.

The rest of us would probably wish to see a recovery of the 50 day moving average, currently at 3.75p, on a weekly close basis before taking the plunge on the long side. Just how far the stock could fly above the 50 day line is suggested by the top of a broadening triangle from February with its resistance line projection at 8p.

CHAL chart

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