DIVIO_B trade ideas
Divio Tech - Time for a bounce?Divio Tech is a small-cap swedish company that seems legit. For further information please see their webpage where the business case - or rather the technology they provide - is laid out in a short, sweet and illustrative way.
www.divio.com
But in short:
The company has a ready product, is currently working on growing the client base, but has already a bunch of impressive names in their portofolio, amongst them the financial player Fidelity.
However they are not yet cash-flow positive, but recenly did a private placement for approx SEK 10MSEK, in addition to some insider purchases that should get them nicely through 2021 without any capital increases. Both offerings were made at SEK 2,37 per share, so well above the current price sitting at 2,15.
All of the above are factors that are good to know. At least do I prefer to make short-term swings in companies that do not risk to fall apart at any moment :)
Anyway, to the point:
Divio has taken a beating recently, after breaking down through the support area 2,40 which initiated a sell-off.
Today the selling commenced all the way down to the MA 200 at approx SEK 2, where we got a nice bounce back up to the closing price SEK 2,15.
Seeing the MA200 doing its job, momentum indicators in the oversold areas, and no (negative) news released from the company that can explain the recent fall, are enough for me to try a short-term trade.
Because Nasdaq is in the red today and the prevailing sentiment in US tech stocks has a tendency to make an imprint in tech stocks traded in the Nordic markets, I will aim to take a position somewhere around SEK 2,05 during tomorrow and set the stop at 1,90 if the MA200 fails and the plan falls apart.
Note that if the MA200 fails, the next level of support should be around 1,75 , while the next main resistance level is approx at 2,60 where the 100 and 50 MAs are hovering.
Notice also that the 2,40 area has acted as a battle ground the last couple of weeks, so that area is probably where I will unload half of my position if the price moves according to the plan.
Update on DivioUnsurprisingly, Divio is falling back from its latest impulse. Hopefully, it will keep itself above the trend channel's roof that it shoot through previously. But if it doesn't, the other hope is that it'll bounce of the MA50 line and establish itself once again above the previous trend channel.
Update on DivioThe short term upward trend I sketched out yesterday was broken, but not necessarily bearish just yet. If we draw out a trend channel from the stocks movement since mid-May, it's clear the recent impulse broke through the trend channel upwards and might now confirm the roof of the trend channel as support.
Divio impulse, new consolidationI usually do not draw short term trend lines, but in this case I'm interested to see how well the short term upward trend will play out. My guess is that Divio will rather consolidate around 0,78 (the blue zone) and then we'll see what happens. Buyers have frequently stepped in when the stock has fallen below 0,77-0,76.
