Breaking Out: This animal nutrition stock may not see feeding frenzy, but bullish potential is there

Breaking Out is a technical analysis-fuelled, short ‘n’ sharp take on chart-busting ASX stocks. Each week, Steve Collette – head of Collette Capital in Melbourne – narrows in on one that’s caught his eye.

Animal nutrition solutions company Ridley Corporation (ASX:RIC) has weathered its share of ups and downs over the years.

While it may not have the high-stakes volatility typified in the pure resources sector, it compensates with steady performance and ample liquidity.

After a high of 280c earlier in the year, Ridley found decent support across 200c.

Recent price action has shown renewed strength, with the August report not causing any great angst.

September is always a tricky month from a seasonal perspective, and more so this year with the Fed about to commence a rate-cutting cycle after one of the fastest tightening regimes on record.

To that end, the relative stability of a stock with 34% volatility in the agriculture sector is appealing.

At the time of writing, price action has the stock at 240c with a break above the 200-day moving average at around 233c.

Should this move hold, there is the potential for a retest of the highs of this year across 280c.

The change in directors’ notices of Tuesday morning seem a bit cute given the values traded, but at least they suggest an awareness of optics for the listed entity.

With the momentum and growth factors looking vulnerable offshore, staples increase in appeal.

If buying here, a stop on a close sub 210c, first target 280c.

Collette Capital offers IMA services to wholesale clients only. Learn more at www.collette.capital

Collette Capital is a Corporate Authorised Representative (CAR: 128443) of Sanlam Private Wealth (AFSL 337927), and only provides general advice.

Collette Capital advise that they and persons associated with them may have an interest in the above securities.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.