See, what chartists and certain downrampers/crystal ball gazers tend to ignore when charting RAC is that this stock is inextricably tied to the Bio sector performance, which is a dumpster fire. And it's not just a biotech issue in isolation. The majority of small-cap stocks have been kneecapped by the horrendous state of the global financial markets. There are exceptions of course, but the downtrend is consistent across sectors - and felt heavily in biotech.
So what?- The company is not the share price.
- Results are not a predictable indicator of share price action.
- Overall company IP value is disconnected from price action in this market.
- Past performance does not dictate future performance.
Micro-scale and macro-scale views of the chart tell vastly different stories, and these stories are absolutely affected by market conditions more than the RAC team's performance (or how that's being perceived).
And what does all that mean?Charts are, as always, of limited value for those who stick to FA when investing. TA is so fraught with caveats - if you're a pip trader, you can absolutely make money buying and selling bollie band breaks. But for most people, they should be re-reading the results to date, reading the most recent comms in the Q4, and reading the countless case studies of how business is conducted in the Biopharma sector
Hint hint: there's a lot of precise strategy and execution that must happen quietly:-Patents filed,
-Patents secured,
-KOLs secured and onboarded,
-Formal collaborations commenced with leading researchers
-Trials progressed (Sheba II incoming, surely)
-International market analysis performed and delivered (Triangle report - reassuringly big $$$, calc'd conservatively),
-Reformulations and co-formulations perfected and delivered,
-Multiple additional trials commenced-- and outcomes to be reported,
-100+ cancer indications being investigated
-BOD strengthened with experienced senior hires
-Largest shareholder preparing to fight to secure best possible shareholder value via strategic exit
-Meetings in the US booked with prospective and existing collaborators,
-#PARTNERSHIPS teased (on LinkedIn no less!)
-Eventually IP licensed and bidding wars enacted.All of these elements (and so many more) may or may not affect the share price in the coming months. We're at the mercy of the markets more than the results.
We know that DCB has indicated a major strategy update in late July/Aug that will shed light on where RAC is heading. This will surely be informed by, if not entirely about, what's happening in the US between now and then. I suspect a lot of what we are waiting on (particularly the last two points) will be surfaced then.
So be patient if you can. I would only be wary of the daily share price action if you're looking to exit early - and crystallise gains made from 2017-to-now, or lock in those tax losses and move on.
Or, if you believe in FA and appreciate the science trust the team behind the scenes, just sit on your hands, or scrape the couch for an extra $1.50 if that price seems like value to you.
Good luck and see you in August.
(20min delay)