At $0.23/share, Has EV Battery Tech (CSE: ACDC) Stock Reached Bottom?
After Riding High, EV Battery Tech Has Touches New Lows, Is It Time to Buy?
As recent as February, shares of EV Battery Tech (CSE: ACDC) were trading comfortably at $0.69. Since then, prices have plummeted nearly 70%, reaching a new low of $0.23 this week. There is no doubt it’s been a rocky ride, but the question now is, has ACDC stock reached its bottom or will it continue to fall?
To help investors looking to capitalize from falling stock prices, here are three methods that will help you understand common fundamental and technical trends that appear in stocks about to hit bottom.
Know the Sector’s Characteristics
Unless there has been company-specific news, good or bad, stock prices tend to follow in lockstep with the overall market and their respective sector. When broader market conditions are trending down, most stocks will follow suit; similarly, when markets move back into bullish territory, stocks tend to climb in line with the overall market.
Traders use several important composite indexes, like the NASDAQ, the Dow, and the S&P500, to gauge general market conditions and economic trends.
The Canadian Securities Exchange (CSE) is a well-known alternative trading platform for small and micro-cap companies. Its exchange index, the CES Composite Index, includes coverage for approximately 75% of all exchanged listed equities, many of which are newly formed and emerging companies. The CSE Composite Index is generally regarded by analysts and traders who follow the sector to be a better gauge of Canadian small-caps than the broader Canadian equity market.
As a small-cap tech stock, EV Battery Tech’s stock price has declined alongside the CSE Composite Index. The tech sector has slipped into correction territory, as valuations across the board have fallen dramatically. However, corrections are generally short-lived. This downtrend is likely to reverse as investors once again begin rotating money out of other areas and back into tech stocks – at lower prices.
6 Month CSE Composite Index (Source: thecse.com)
6 Month EV Battery Tech (source: thecse.com)
Check the Price and Volume
Once you have researched the sector, you can look for signals that could help indicate whether your stock has reached bottom or still has further to run.
Technical analysts look at two important trading indicators when making their stock price predictions – price and volume. Stocks tend to bottom when there are few sellers and more buyers. Buyers with few sellers must be willing to pay a higher price for shares – and a bottom is formed.
Based on basic supply and demand principles, as fewer sellers exit the market and more buyers enter, stock prices rise. Trading volume helps to add credibility to upward price movements; the higher the relative trading volume is at the ask price, the more likely stock prices will continue to rise.
For example, suppose a stock’s average daily trading volume was 5 million shares while prices fell significantly. However, during the past three trading sessions, the stock averaged 15 million shares daily, and the stock price has climbed. According to technical analysis, the stock has reached an infection point, price trends will reverse, and in this case, they will rise.
According to Yahoo Finance, the average trading volume for ACDC over the past three months is around 1.3 million. Trading volume on Thursday increased to 1.7 million, with shares up slightly over the previous day’s close.
Despite all the tools, tips, and techniques available, herd mentality investing is still widely prevalent in markets today. This has led some investors to believe that markets tend to over and undervalue stocks based on excessive enthusiasm or fear, resulting in stocks that have been mispriced, particularly at market tops and bottoms.
Contrarian investors buy when the market is selling and sell when the market is buying – and there have been many instances where going against the grain has been highly profitable for investors.
In 2007, the oil and gas sector went through a significant and prolonged bear market. Oil prices dropped more than 50%, and no investors wanted to touch oil stocks. Contrarians took this as a sign to snap up blue-chip oil stocks at a deeply discounted price and were rewarded with substantial gains when prices eventually recovered.
EV Battery Tech Milestones
Deal with LEV Maker Daymak
On February 5, 2021, Ev battery tech entered into an exclusive agreement with a leading Canadian LEV manufacturer Daymak to provide its patented AI-driven Battery Management System (BMS) and battery packs for Daymak’s upcoming six-vehicle Avvenire lineup.
The 5-year deal, which automatically renews for 1-year terms, went into effect immediately.
Daymak is an established LEV maker with over $100 million in sales to date. An estimated 30% of the company’s LEV production costs are tied to its battery systems, which will be exclusively provided by EV Battery Tech.
Pre-order sales of the Avvenire line have exceeded $141 million in their first week.
Unveiling of IoniX Pro TITAN™ Series (ESS)
On January 18, 2021 EV Battery Tech released details of its revolutionary IoniX Pro TITAN™ Series Energy Storage System (ESS). The Titan will be powered by EV Battery Tech’s patented AI-driven Battery Management System (BMS). Each unit will be roughly the size of a 40HQ shipping container and capable of generating up to 3,000 kw/h.
Large-scale ESSs are already being deployed by governments looking towards shore up energy security and prioritize renewable energy solutions.
Ukraine recently announced the completion of a 1MW/ 2.25MWh lithium-ion grid-scale ESS, and a 10MW / 20MWh battery energy storage project has recently been approved in Belgium.
The IoniX Pro TITAN™ Series is expected to compete with the Tesla MegaPack, which has seen “unprecedented demand from across the globe.” Speaking at the unveiling, EV Battery Tech CEO Bryson Goodwin commented:
“With this scalable product, we hope to service both small markets and large markets, ranging from minor remote backup to major cities. These products could be the answer to intermittent renewable energy, remote community reliance on fossil fuels and balancing of overloaded city grids,”
Exclusive Agreement with Major Property Developer
On June 10, the company signed an exclusive agreement with Fairwater Properties by which Fairwater agreed to use EV Battery Tech exclusively as its provider of energy storage system (ESS) and electric vehicle (EV) charging solutions for all of their current and upcoming projects.