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I would not call myself a TA guru, but I do like to look at the charts to get a sense of where a stock has been and where it may be heading. For reference, I tend to use Eliott Wave as my primary method and so the below speaks to my interpretation from an EW approach.
I agree that this has broken out and as per my 3 year chart below, I have interpreted this as the commencement of an Eliott Wave 3 (which is certainly the "Wave" you want to catch). In my opinion, the low of 7.2c in March 2020 was the end of a long downward trend and since then we have seen a clear 5 wave impulse wave (collectively comprising what I have labelled as Wave 1) from that low to the Jan/Feb 2022 high of 21.5c - so an upward move of 14.3c in total. We have since been in a corrective Wave 2 that concluded with the 10.5c low in Dec 2023 (a decline of 11.0c or 77% of the Wave 1 upward move, which is very close to a classic 78.6% Fib retracement). Supporting this is the break of the downtrend that has existed since early 2022.
On this larger scale picture, I am interpreting that we are now in Wave 3 and so my target is a total move of 162% of Wave 1 (this being a classic Fib extension level and what you generally look for after a 61.8% or 78.6% retracement). This then suggests a target of 14.3c x 162% = +23.2c from the recent 10.5 low = a target of circa 33.7c (so in a ASX sense, we are talking circa 33c to 34c).
On a fundamental basis, this share price target lines up quite nicely with prospective valuation. If I apply a 4.5x multiple to my current expectation of BOL's FY24 EBITDA of $46m (inclusive of Right to Use) and then deduct net debt, I get an equity value of $137m and a target share price of 32c. I have used 4.5x multiple as this approximates the multiple at which the takeover of BLY has seemingly been pitched on my back of the envelope analysis.
Note, if BOL upgrade their FY24 forecast when they present the half year, then the above EBITDA I have used would need to be adjusted.
If this is indeed Wave 3, we should start to see some really significant upward movements in share price in relatively short timeframes. Half year update could well be the impetus for this.
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