Could you please give me your opinion on Graphene 3D Lab.
Thank you for your time.
Cécile
Hey Cécile,
Thanks for the assignment. I have been watching the graphene space with interest for the last two years. I like the promise that the science offers, and the opportunity to explore the potential of Graphene 3D Lab Inc. is most welcome. The strength and conductivity properties of graphene have attracted capital in the search for the breakthrough application that will push the material from labs into industrial use.
GGG is innovating the use of materials blended with graphene into the 3D printing sector. The first phase is the development of filaments for existing 3D printers and then, in later phases, the creation of a specific 3D printer that can fully exploit the unique properties of the filament they have designed.
What needs to be recognized is that GGG is a development stage company with no revenue and has been generating losses as it pursues its mission. These factors, in addition to a market cap of $34.71-million, demand that this stock be considered as part of the speculative portion of your portfolio.
A review of the charts will identify patterns that may help you manage this investment.
The three-year chart points to the jump that occurred in August of 2014 when the shares began trading on the TSX Venture Exchange. The company executed a reverse acquisition/takeover of an existing listed entity. The shares were recapitalized, which got investors excited about the opportunity. After hitting a 52-week high of $2.56, the shares began pulling back to the $0.80 level.
Since late October of 2014, a downtrend line has formed which has been providing resistance to any advance. A death cross surfaced in late February which also needs to be monitored given the negative implications associated with the pattern. As a final note, the MACD and the RSI were generating sell signals as early as September of 2014, which the knowledgable investor could have acted upon.
The six-month chart depicts the resistance along the 50-day moving average, which has held back every attempt to move higher. At this juncture, GGG needs to break above resistance along the downtrend line with conviction or face the possibility of retesting support at $0.60. At best, GGG is speculation bordering on a gamble. Proceed with extreme caution.
Next time, I will examine the case for Cipher Pharmaceuticals Inc.
Make it a profitable day and happy capitalism!
Have your own question for Lou? Send it in to lou@happycapitalism.com.