A Double Blessed Buy For Alchemia

This story features AUSTRALIAN CLINICAL LABS LIMITED. For more info SHARE ANALYSIS: ACL

They labeled it a "Double Blessed Buy". We assume this means the positive view is carried both by fundamentals as well as by a favourable technical set-up.

Shares in biotech Alchemia ((ACL)) started the calendar year at $0.30 and they rallied to twice the price in the subsequent months, but after that it was all over and the share price has drifted back closer to $0.50. Judging by the price target analysts at RBS Morgans hold for the stock ($0.61) it is probably fair to assume all the available value had been priced in, for now, and Mr Market was simply not prepared to start pricing in some of the unknown blue sky potential.

RBS Morgan analysts have caught up with latest developments, noting the sideways drift has now created a favourable set-up for a rally back to their price target (and price levels seen earlier this year).

Report the analysts: "Thursday's price action retraced close to its support of $0.41 and completed a strong intra-day reversal signal, showing that there is a strong buying support around that level. We believe the price will bounce from here and rally to $0.61."

RBS Morgans rates the stock a Buy with a $0.61 price target. In technical parlance, there should be resistance at $0.55, $0.58 and $0.61 respectively.

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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