This report is an updated version of the report published on 14 May 2024 at 06:45 AM GMT. 

Company Overview: Chrysalis Investments Limited (LON: CHRY): Chrysalis Investments Limited is a Guernsey-based closed-ended investment company. The investment aim of the Company is to generate long-term capital growth through investing in a portfolio consisting primarily of equity or equity-related investments in unquoted and listed companies. The Company invests primarily in equity and equity-related instruments (which shall include, without limitation, preference shares, convertible debt instruments, equity-related and equity-linked notes, and warrants) issued by portfolio companies. The Company also invests in partnerships, limited liability partnerships, and other legal forms of the entity where the investment has equity-like return characteristics. Jupiter Unit Trust Managers Limited is the Company's investment adviser. This Report covers the Price Action, Technical Indicators Analysis along with the Target Levels, Stop Loss, Support Levels, Resistance Levels, and Recommendations on the stock. 

FTSE All-Share Index (.FTAS) Market Round-Up

Last week, the FTSE All-Share Index (.FTAS) kicked off on a positive note, fueled by supportive company earnings sessions. It rebounded from lower levels and sustained a positive trading stance throughout the entire week. Despite hitting a low of 4469.09, it closed robustly higher at 4586.29, marking an impressive gain of about 2.62% for the week ending May 10, 2024. The recent week carried forward this positivity, riding on favorable global market sentiment, and concluded at the 4575.30 level.

From a technical standpoint, the index displayed resilience and confidence in maintaining its bullish trajectory last week, bolstered by encouraging global developments. Currently, the index finds solid support from the lower channel and supports a position above its 52-week average, showing a potential continuation of the positive momentum. The RSI (Relative Strength Index) 14-Period is trending upwards with a reading of 78.04, affirming the bullish sentiment surrounding the index. Furthermore, the current market price (CMP) is still above both the 21-period SMA and the 50-period SMA, suggesting these levels may serve as crucial support zones. 

Global Markets Wrap-Up 

Last week, Wall Street witnessed a recovery with positive sentiment with supportive company earning numbers. Wall Street reacted positively and closed in positive territory by the trading weekend. The S&P500 settled at 5222.67, marking a gain of ~1.85%, while the NASDAQ Composite Index closed at 16340.86, registering a gain of ~1.14% for the week ending May 10, 2024. 

Having understood the US market performance over the past week, taking cues from major global news, and based on technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now have a look at the one LSE-listed. stocks pick from the technical analysis standpoint. Noted below are the recommendations based on entry price, target prices, and stop-loss for Chrysalis Investments Limited (LON: CHRY) for the next 2-4 weeks duration:

Chrysalis Investments Limited (LON: CHRY) Noted below are the key price indicators for the recommended stock:

Price Action Analysis (on the Daily Chart)

 On the daily chart, CHRY's share prices are displaying a bullish trend within an upside channel, with prices currently above the consolidation zone. Bullish momentum is evident, supported by the RSI reaching 74.57, showing the stock is in overbought territory. Despite this, the RSI's high value suggests strong upward momentum, potentially showing further price appreciation. The stock's price is also above the lower trendline support, reinforcing the bullish trend. An important resistance level is found at GBX 105.00, and prices may test this level in the short term (2-4 weeks). 

Technical Indicators Analysis (On the Daily Chart) 

On the daily chart, the RSI 14-Period (Relative Strength Indicator) is currently situated in the positive zone with a reading of 74.57. Moreover, the volumes support an upside movement. The current market price (CMP) is trading above the trend-following indicators, the 21-period SMA and the 50-period SMA is above, which may act as small support levels.

General Recommendation: 

As per the above-mentioned price action and technical indicators analysis, Chrysalis Investments Limited is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendations is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices. 

Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact stock prices include market risks, regulatory risks, interest rate risks, currency risks, social and political instability risks, etc. 

Note 1: Individuals can consider exiting from the stock if the Target Price mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 2: How to Read the Charts?  

The Green color line reflects the 21-period moving average while the red line indicates the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.  

The Black color line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status. 

The Blue color bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume and liquidity in stocks helps in easier and faster execution of the order.  

The Orange color lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.  

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.  

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.  

Stop-loss: In general, it is a level to protect further losses in case of unfavorable movement in the stock prices. 

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. This report is based on ~60% Stop Loss of the Target 1 from the entry point. 

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. Individuals can Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Individuals should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 13, 2024. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations 

CMP: Current Market Price 

SMA: Simple Moving Average 

GBP: British pound sterling 

GBX: British pence sterling 

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.