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RC365 (LON: RCGH) share price is having a pullback after a major price rally. The shares have broken down below the upwards channel, which shows that the bulls are losing momentum. The outlook remains bullish for the shares but a bearish scenario is also developing on the chart.
On Monday, UK shares showed mixed sentiment. The bank shares were down once again. However, RC365 shares had a strong rebound from last week’s lows. At press time, the stock was trading at 116p after rising by 16%. Technical analysis suggests the ongoing pullback may turn into a deeper correction.
According to the recently released financial report, the revenue of RC365 Holding plc doubled in the year on 31 March 2023. During this time, the revenue increased from HK$ 8.1 million to HK$16.9mln. However, there was a massive increase in the losses of the payment gateway provider.
The results revealed that the firm had a loss of HK$5.4mln during the year, which was 38% more than the previous year. This was the primary reason behind a strong sell-off in shares which fell to their lowest level since July 12. This translated into a 53% decline from its recent peak of 180p.
In my previous LON: RCGH forecast, I mentioned the formation of ascending channel on the chart. After the release of financial results, the shares have broken down below the bottom of this channel which was acting as a support. Despite a pullback, the price didn’t close below 98.5p, which is the 0.5 fob retracement level.
Due to the recent breakdown, the RC365 share price forecast is not looking very bullish. The price must reclaim back the ascending channel to remain in an uptrend. In case of a deeper pullback, bears may target 80p, which is the 0.618 fib level as shown in the following chart.
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This post was last modified on Jul 31, 2023, 12:45 BST 12:45