AB Dynamics PLC (ABDP.L) is a United Kingdom-based company engaged in the design, manufacture and supply to the global automotive industry of advanced testing and measurement products for vehicle suspension, brakes and steering both in the laboratory and on the test track. The Company’s products service include Kinematics and compliance testing, Vehicle dynamics testing on the track, Driver assistance system testing, Driverless vehicle track testing, Steering system testing and Noise/vibration (NVH) testing of power train assemblies. The Company’s products include Suspension Parameter Measurement Machine (SPMM), Steering System Test Machine (SSTM), Driving robots, Driverless Test Systems, Soft Crash Target Vehicles (SCTV) and Powertrain NVH Testing.
The chart of AB Dynamics is shown below and it shows a very positive story for the share which is listed on the main market and has a market cap of 88 million pounds.
ABDP.L is undervalued by the market and growing sales and earnings per share strongly. After a strong advance, the price has consolidated within one of my favourite chart patterns which is named an ascending triangle. Within the ascending triangle, it quite easy to see the 5 wave structure which makes the consolidation nigh on a text book example of this very bullish pattern. My mentor MR. W D Gann always instructed that markets should break on its fourth attempt and that is what ABDP is trying to achieve at the moment.
On VectorVest, the share has been given a BUY recommendation during the last two trading sessions.
On the left of the chart, the vertical line represents the size of what chartists refer to as the “flagpole”. This distance in pence should be repeated if and when the share breaks from the ascending triangle. That would result is a technical objective of around 700, which is close to the VectorVest calculated fundamental value of the share. The value is charted as the green line above the price in the chart above.
At VectorVest, we believe is combining fundamentals analysis and technical analysis and getting the best of both worlds. Our objective is to buy shares with outstanding fundamentals that are trending higher WHEN the general market is moving upwards.
ABDP certainly ticks the boxes for both its fundamental and technical position, but the technical position of the general market is poor. The technical position of the VectorVest Composite has improved slightly on Friday November 18th with the trend situation summarized as UP/Down. This means that the Primary Wave, or short term trend of the overall market, is positive while the underlying remains down. The advice on the front page recommends caution and that is sage advice. There are no green lights on the Color Guard as yet.
Please brush up on the sequence which takes place at each and every turn. I have detailed them here a dozen times.
Firstly, the Primary Wave turns (that’s done), and then green lights in the price column are sighted. At this point, aggressive traders can start to accumulate shares. If the trend persists, the next signal should be a black star within the green light. This indicates that the trend has been confirmed by momentum. In VectorVest speak, this is known as the price trend being confirmed by the RT Kicker timing system. Next, the DEW market timing system should print a Buy signal followed by the underlying trend turning Up. Finally, the underlying trend is confirmed by price action. This is the most conservative Buy signal on VectorVest and is known as a Confirmed Call. At this stage, even the most conservative investor should be onboard. The Confirmed Call is the timing method used in the conservative trading plan known as Worry Free Investing.
Summary: Both the technical and fundamental position of AB Dynamics look excellent. When the advice on the front page of VectorVest advocates that it’s safe to accumulate shares, then ABDP.L is worthy of your attention
November 29th 2016
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