Surna Inc (OTCMKTS:SRNA) is struggling to power through a tight trading range as it continues to languish at all-time lows. A lack of updates, as well as catalysts, is one of the reasons why the stock has remained subdued at all-time lows, amidst soaring short selling pressure.
Share Price Analysis
The stock has shed more than 70% in market value over the past year, as short sellers remain in firm control. However, in the recent past, the stock appears to have hit strong support at the $0.07 level. Investors need good news if Surna is to bounce back from the subdued levels.
For the better part of the year, Surna has continued to trade in a $0.07 to $0.09 trading range as the markets await new updates to validate the next direction of trade. A rally followed by a close above the $0.09 mark, should reaffirm the emerging uptrend, setting the stage for the stock to bottom out from all-time lows.
Considering the long-term downtrend, Surna will have to rise and stabilize above the $0.12 mark to stand a chance of powering high and avert a possibility of further slides. Below the $0.12 mark, the stock remains vulnerable to further drops given the underlying long-term downtrend.
Surna casts itself as a designer and manufacturer of environmental control and air sanitation systems, used in indoor cannabis cultivation facilities. The company is also engaged in the distribution of chillers, energy recovery units, and fan coils.
What Next For Surna
Surna looks set to remain under pressure given the lack of clear-cut updates needed to trigger a bounce back from all-time lows. The company has scheduled shareholders meeting on March 26, 2018, where the management is poised to provide an outlook for 2019.
Some of the topics the management is poised to touch on include how they intend to leverage the company’s strong brand name, to pursue opportunities for growth. The management is also reportedly planning to position the company as an expert helper in environmentalist controls management. Plans are also underway to expand the company’s operations to help in the provision of an array of products and services.
In the 2019-2020 fiscal year, Surna is also reportedly planning to evaluate the first generation grow facilities as part of its broader service and product offerings. It also plans to roll out new sensors as well as controls and automation product offering.
Everything should be clear when the company reports its Q4 financial result on March 26.
“This Q4 2018 earnings call is the launch of the Company’s new investor relations program and its efforts to fully engage with the investment community on an ongoing basis. Beginning with this earnings call, the Company is committed to establishing a robust, two-way communications program in the form of quarterly earnings calls open to all with short scripts and fulsome Q&A time,” Surna in a statement.
In addition, the company is relying on the new management team led by CEO, Anthony McDonald, to spearhead a bounce back when it comes to growth.
McDonald joined the company late last year as an independent director before being appointed as the new CEO and President.
“Tony, who resides in the Boulder area, has a mandate to strategically position Surna as a leading engineering and technology solutions provider in the fast-growing and rapidly evolving cannabis industry. With a solid operational foundation now in place, we will look to Tony to develop and articulate the Company’s blueprint for the future,” said Timothy J. Keating, the Company’s Chairman of the Board.
Surna finds itself in a precarious position given the lack of clear-cut updates or catalysts that investors can use to gauge the company’s long-term prospects. A lack of press releases as well as updates have gone a long way in hurting the stock’s sentiments in the market.
However, the company is looking to set the record straight starting March 26 when management will host a shareholder update as well as report financial results for Q4. The company reporting revenue growth for Q4 is a development that should strengthen the stock’s sentiments in the market and trigger a bounce back from current lows.
Given the risks involved until the March 26 update, it might be wise to maintain a backseat waiting for further confirmation on the way forward. We will be there for the March 26 update and report accordingly.
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Disclosure: We have no position in SRNA and have not been compensated for this article.