Editor’s note: This article was first published in March 2013. The market commentary, including share prices (support at €0.145-0.15, possible drop to €0.12), the “big bet for 2013-2014” and the reference to the Cyprus bailout, is specific to that moment.
The chart shows that Ezentis’s technical picture has worsened. The stock has lost support in the €0.145–0.15 area and broken out of the channel we had drawn, in which it was building higher lows. That pattern has now broken, and after a break like this we could even see Ezentis at €0.12.
That said, that’s the technical analysis. When we recommend Ezentis, we do so purely for its growth potential: its results so far have been “improving”, and I believe Manuel García Durán is steering the company in the right direction. Admittedly, carrying out another capital increase of almost 2 million euros was not the luckiest move, and it has only given the market another reason to punish the stock.
At current prices, this is a good entry point for anyone who wants to take a position in the stock. Alternatively, you can wait in case the drop goes further.
We should also bear in mind that the latest blow to the eurozone, the situation in Cyprus, could hurt practically every stock, and Ezentis is no exception.
If we buy into this company, it’s with a long-term horizon, and the investment should be considered a risky one. Personally, as I’ve said before, Ezentis is my big bet for 2013-2014, so I’m using these dips to buy more. So either I make a lot of money or I take a big fall.
Featured image: Michal Osmenda from Brussels, Belgium, CC BY 2.0, via Wikimedia Commons.
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