This stock has pulled back to the critical buy level again
As you can see, the share price tested the R10 resistance level (ceiling) in 2014. However, it failed to break above it.
It then tested it twice in 2015, first failing to maintain a breakthrough in the beginning of February and pulling back to R8.
And the third time it managed to break through in August which sent it rallying to R14.
The R10 level is proving to be a significant level, after maintaining it in 2016 where it is now trading at it today.
So what could see it rally from here?
An imminent announcement could be the catalyst for another rally
On March 2nd, this company said its busy negotiating to buy a company, when it announced, “Shareholders are advised that the company has entered into negotiations in respect of a possible acquisition...” and “shareholders are advised to exercise caution…”
This company has a long track-record of successful acquisitions, after all it’s a 10 bagger, in just 5 years this company’s shares have risen from R1.06 on 24 April 2012 to R10.60 today.
If you’ve guessed this company is Adapt IT, you’d be correct.
It’s one of the stock market darlings, and many investors that didn’t get in early are kicking themselves today.
For the past three years, it’s become a good stock to trade as well, so you can invest in it for the long term and trade it too.
Here’s what you have to do!
Buy below R10.75 for a 53.4% gain in under 7 months
You can buy the physical share or you can trade a CFD on it and increase your potential profit, but don’t be too greedy and maximise your exposure.
Look to gear yourself up to a maximum of 3 as this is a small cap and they can be very volatile and if you are risk conscious like me, phase it in using two transactions.
The margin is R1.05 when using a CFD. And a stop loss at R9.50 will limit your downside but give it enough room to allow volatility to not stop you out unnecessarily.
Set your profit target at R16.50.
Prodigy Asset Management
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