Ironically, Hydrodec (LON:HYC) would typically be the type of stock I would avoid charting. But the present situation on the daily chart is rather hard to resist.
I have to admit that Hydrodec is not a company which I have been over familiar with, despite my almost encyclopedic knowledge of the AIM market’s more famous, and indeed infamous, plays. However, this is an oil re-refiner – not a concept that many may have heard of before. Nevertheless, it would appear that the fundamentals here have taken a positive turn, something which is said in the wake of an update from the company on January 30th.
In this announcement, Hydrodec said it had doubled the sales volume of its transformer oil and base oil to 33.3 million litres, and improved its sales mix between higher margin transformer oil and lower margin base oil. On the back of all this Hydrodec was able to forecast that it would be able to beat market earnings expectations for this year, as well as achieve positive earnings for 2017.
From a charting perspective it can be seen that the big technical breakthrough this week has been the push above the 200 day moving average, now at 2.48p. This allows us to suggest that provided there is no weekly close back below the 200 day line we could be treated to a best case scenario target as high as 5p at a 2016 resistance line projection. The timeframe on such a move is regarded as being the next 2-3 months.