Rather strangely perhaps for a technical analyst I do not usually look at the volume data on stocks and markets. But today highly traded Earthport (LON:EPO) is a decent exception.
Although I have to confess the world of cross border payments is about as dull a subject as I can imagine, there is a rule of thumb to investing that the more boring the business, the better it may be to make you money. Hopefully, this may turn out to be the case with Earthport, on the occasion of the full year results to June 30 2016 revealed this week. Helping to underpin the buy argument is the fact that revenues were up 18% to £22.8m, with an 89% rise in transactions. But for me the real kicker is that gross margins are up at 70% to leave gross profits at £15m.
From a technical perspective it can be seen from the daily chart that there has been a base made over the post March period, with the 50 day moving average now at 15p recovered in August, and the 200 day line likely to give way on a weekly close basis now. All of this goes to suggest that provided there is no weekly close back below the 50 day line, we can look to progress within a rising April price channel with its resistance line projection pointing at 25p. The time frame on the upside scenario is regarded as being the next 1-2 months or less.