Lightning Analysis - ADE - Adelaide Energy

Lightning Analysis - Adelaide Energy

This is a very quick look at Adelaide Energy following a positive speculative news article recently.

http://www.news.com.au/adelaidenow/story/0,22606,25200329-913,00.html

http://www.theaustralian.news.com.au/story/0,25197,25444885-23634,00.html

Read those articles for yourselves - my impression from them is that ADE is a good speculative punt. However ......

I started looking at some fundamentals and technicals. Please note that this not meant to be a thorough analysis. But my quick calculations tells me that I would not be touching this stock no matter how good the news is until they get some more cash.

From their recent quarterly statement:
Revenue: $406K - first revenue after their purchase of Katnook Gas Plant from Origin.
Operational Cashflow: -$950K
Investment Cashflow : $1.083m
Cash at end of quarter: $409

Assuming the investment income is once off, and assuming revenue will be steady, if operational cashflow remains similar, say $900K, then ADE won't have enough cash to last the next quarter. At this point, I would stop all further analysis and wait at least to the next quarter results.



In terms of technical analysis, a simple Gann analysis would show that current price has almost reach the level of the last significant high at around 15c. Also that high point is about 11month to 1 year ago - another signficant time period in Gann analysis. This is a point to pause and see if it will break out of the resistance level and go higher.

In summary, although prospects of ADE sounds good, both fundamental and technical indicators suggest waiting before buying into it.

Technical Analysis - Update Dow and All Ords Weekly Gann Charts

It is about 2 months since the last post on the analysis on the Dow Jones index and the Aussie All Ords index. In that time, the market has climbed significantly on renewed confidence. The consecutive weekly gains left such an impression on some that there is talk that we have reached the bottom of the GFC (Global Financial Crisis). Instead of random speculation, let's turn to our weekly charts.

In the previous post,
http://ozstock.blogspot.com/2009/03/technical-analysis-update-dow-and-all.html
the DOW seem to be right in between a set of Gann bear angles and bull angles. The All Ords at that time was testing an important angle for support.







In the current situation, the All Ords seemed to have not only found the support but has bounced up from it. The Dow stopped in the middle of the 2 angle supports and also bounced upwards strongly.

So are there any indications of support or resistance in the near future? Looking at the Dow first, it is almost at the point of touching the (pink) angle from the top of the 2007 boom, which is a potential resistance. For the All Ords, although it has crossed over the support angle emphatically, it is approaching the top of the 20 day maximum envelope, almost like being sandwiched between the support angle and the envelope.

Two other historical pattern to note are: i) the "Sell in May" adage; ii) the Gann seasonal date of May 5, both of which is acting against the current trend.