Deveron UAS Ltd. (DVR:CSE) is an interesting company, because it provides professional drone services to assist farmers in maximizing production. Deveron’s stock has not been so interesting over the past year or so, however, because it has basically moved sideways, and some of you may recall that we bought it last April and after missing the opportunity to sell on a rally soon after we got stuck with it.
Now though it looks like the company's prospects could be about to improve, perhaps dramatically, because there is clearly huge potential in what it does, and it is understood to be teaming up with the giant agri-company Monsanto, and another positive is that it has just successfully completed a financing.
So while there is certainly scope for the downtrend now in force to take the stock price back down to the nearby support shown on its 1-year chart in the C$0.20–C$0.23 zone, especially in adverse market conditions, there is considered to be a fair chance, given the positive factors just mentioned, that it will turn up here or very soon, from support at the lower boundary of the uptrend channel, and if so a sizable rally will be in prospect.
The 2-year chart is presented below so that you can see all of the action from where it came out of a long trading halt or period of suspension in mid-2016. There are 3 interesting points to observe on this chart. One is that it shows that the overall trend has been neutral since it started trading again, the next is that the C$0.21 area is clearly an important support level, as the price has reversed at this level four times now. Finally we can see quite strong volume kicking in on the rally in November and again in January, which is bullish, and makes it more likely that the uptrend shown will remain in force, which means it should turn up here.
Lastly, we will look at a 6-year chart, which shows all of the action since it started trading back in 2012. It is more evident on this chart that there is a considerable degree of compression in Deveron stock here as it is being forced into a narrowing range between the horizontal band of support at about C$0.21 and the falling trendline descending on it from above. Superficially this Descending Triangle looks bearish, but any bearish interpretation of this pattern is belied by the quite strong volume driving the November and January rallies, which imply that it will break out upside from the Triangle, and if it does, it is likely to make a big move.
Conclusion: the charts for Deveron look bullish, especially given its positive fundamentals. Holders should therefore stay long and it is rated a buy here and especially on any dip towards the support in the C$0.21 area. Deveron has 29.2 million shares in issue (fully diluted).
Deveron UAS Corp website
Deveron UAS Corp, DVR on Canadian Stock Exchange, closed at C$0.30 on 15th April 2018.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.