This may seem like a rather oddball stock for us to look at, since this is a company that makes products that help prevent cooking fires, but who cares as long as the stock goes up a lot? Actually this company is really on to something, because cooking is the number one cause of household fires and fire injuries, and if they succeed in grabbing a large slice of the market in products that help prevent this, which they look set to after years of work, they should do very well.
On the 6-month chart for PTE we can see that the stock is in a fine steady uptrend, and the reason for our interest now is that it looks like it is at a “buy spot” here as a near two month trading range comes to an end, a trading range that has the characteristics of a consolidation pattern within an ongoing uptrend, not a top. Factors supporting an upleg developing from here are as follows: the 2-month sideways movement has allowed the earlier overbought condition to largely unwind, as shown by both the MACD and RSI indicators. The volume pattern is bullish, with high volume on rallies and much lower volume on reactions – note here that the big red volume bar over a week ago is misleading – while it did close a little lower on this day, it was well off the lows leaving a big white candle on the chart. Volume indicators, shown on the 10-year chart, are positive. On many days in the recent past the price closed at the day’s high, and last but not least the consolidation of the past 8 weeks has allowed both the 50-day moving average and the lower uptrend channel boundary to catch up with the price so that they are now in play supporting the price and expected to drive another upleg very soon.
To see what underlies the current uptrend we now turn to the longer-term 10-year chart. On this chart we can see that the stock has been plodding sideways for years marking out a large Pan base, which it now appears to be starting to emerge from. The marked pickup in upside volume in the recent past and positive volume indicators are a sign that it is powering up to break out of this base pattern. The 2010 peak at about $0.46 marks the top of this base pattern. Short-term it looks set to make a run at least to the resistance at this earlier peak, and if it should succeed in breaking above it, which may happen after consolidation or a reaction from the $0.46 area, the rate of advance could accelerate dramatically.
While it is of little use technically, the long-term chart going way back to 2001 reveals that PTE once reached giddying heights above $34 in 2004, since which time the stock has been largely a waste of time. However, what we have looked at this morning suggests that this is now changing and that the stock is a very worthwhile investment here.
Conclusion: Pioneering Technology is rated a strong speculative buy here. For safety buyers should place a stop beneath the clear line of support at $0.27, say at $0.255 to reduce the risk of being whipsawed out by a brief intraday drop, just in case the pattern doesn’t deliver the advance we are expecting. The company has 28.65 million shares in issue, which is modest given how long it has been around. The stock trades in almost non-existent volumes on the US OTC market, where it should avoided for this reason.
Pioneering Technology
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Pioneering Technology Corp, PTE.V, PTEFF on OTC, closed at $0.31 on 8th June 16.
Posted at 9.10 am EDT on 9th June 16.