Reabold Resources PLC

Reabold Resources PLC (LSE: RBD) is an FTSE AIM All-Share listed UK-based investor in oil and gas projects, primarily operating companies in the oil and gas asset of interest.

Investment Rationale – Sell at GBX 0.394

• Profit Booking Opportunity: The stock price witnessed a decent rally and managed to breach the resistance levels provided in the last coverage. Thus, it would be a decent opportunity to book profit for the investors.
• Losses Increased: The loss stood at £1,384,000 in H1FY21 versus £508,000 in H1FY20, primarily due to increased administration expenses and the unfavourable exchange rate movement in H1FY20.
• Increased Interest in Corallian: It acquired an additional 13.12% interest in Corallian, resulting in total ownership of 49.99%, thereby growing its stake in the Victory gas discovery.
• Strong Results from B-1Z Well: Testing of the B-1Z well indicated significant results to understand the West Newton field.
• Technical Indicators: RBD’s prices moved up by ~58.84 percent from the recommended entry price and made a high of GBX 0.3971 on February 25, 2022. On the daily chart, RSI (14-period) is moved to an overbought zone and currently trading at ~85.20 levels, indicating the possibility of a downside correction in the stock prices. Prices are also getting resistance from psychological level GBX 0.4000 further supporting a downside correction.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Based on the loss-making nature, profit booking opportunity, and considering the current resistance levels, we suggest investors to book profit on the stock. Hence, we give “Sell” recommendation on Reabold Resources PLC at the current market price of GBX 0.394 (as of 25 February 2022, at 01:48 PM GMT).

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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