Eqtec: Golden cross aftermath points to 20p plus

While it may be over egging it to suggest that Eqtec (LON:EQT) is my new favourite minnow, there is plenty on the technical and fundamental side here to appreciate.

One of the happy realities for the start of 2017, and for those like myself who love small caps, is that we are very much back on the front foot as far as this asset class is concerned. Indeed, I would venture to suggest that after some 20 years the boom times are back. That is not to say that you can buy almost anything and it will go up, but that where a company has even a modicum of decent promise the bulls will get in with enthusiasm.

As far as the news specific to Eqtec is concerned, the recent loan conversion and the placing at 5p, after which the shares have soared, is a classic fundamental buy signal, as is the fact that Spanish parent EBIOSS also invested in the company last month as it moved to secure its UK biomass gasification projects with new technologies.


Looking at the daily chart it can be seen how we have been treated to an extended base for the shares since the summer of 2015, with this process officially finishing after the latest golden cross buy signal between the 50 day and 200 day moving averages at just under 5p.

Since then a v-shaped bull flag has developed, and looks more than strong enough to propel Eqtec towards an implied 2015 price channel top target of 20p plus over the next 3-6 months. Only cautious traders would wait on a break of neckline resistance at 10p before taking the plunge. Only sustained price action below 5p delays the upside scenario.