Chart of the Day: Motio (ASX: MXO) moves into exponential phase
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This week we’re highlighting another stock in uptrend, and unlike last week this is explicitly a name where we have put our money where our mouth is – that is to say it is a significant holding in the IMA service operated by Collette Capital – and we anticipate that it will continue to be for some time.
Motio (ASX:MXO) has been trending higher for some time – with a one-year daily chart revealing just how pervasive the uptrend has been in recent times.
The rate of gain has moved into an exponential phase just of late, and whilst that tends to lead to greater volatility in both directions in the shorter term, one can see just how much room recent gains have left on the chart before the broader uptrend would come into play.
We see this level at being around the 10 to 10.5c mark at present.
One can also observe that this particular trend-line, black on the below chart, is also being hugged by the simple 50-day moving average in recent times, and so there is reason to think this level should lead to good support in coming weeks should it be tested.
Another thing to note about MXO is the absence of any recent gaps on the chart, which as simple as it may seem, from a technical perspective, is uncannily a factor.
Gaps get filled all too often, and whether that is simply a self-reinforcing attribute of technical price action or otherwise, as something that keeps occurring, we take notice.
The one attribute that MXO misses meaningfully from a price action perspective, at least to this point in time, is robust liquidity.
It is often a conscious sacrifice that one must make in emerging names such as this, wherein one needs to appraise the opportunity as understood at a current market cap in the order of ~$30m, relative to the inability to sell stock in any meaningful size if circumstances were to suddenly change, and one wanted to get out.
In this case, the risk is felt to be entirely justified.
Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.
Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.
The Collette Capital Wholesale IMA Strategy has returned +24.57% p.a. net of all fees as at the end of February 2021 since inception in January 2015 (using the Time Weighted Return method of calculating returns).
Learn more at www.collette.capital