BUY: Versatile Flag Breakout

True to predictions Versatile broke out of its very tight Flag pattern resistance level of 0.875 on 10 July on relatively high volume and closed at its high. If it stays above 0.875 & volume continues to rise or stay high then the breakout is confirmed.

This leads to a BUY call on Versatile. Target Price is 1.35.

As Versatile's real value lies in its substantial interest in Iris Corp, I have also included the Iris chart for discussion. Iris is very close to its historical high of 1.38 (currently 1.33). On 22 June the 'designated stock' status was removed by Bursa and the stock jumped from 0.875 (on 21 June) to 1.08 (on 22 June). If we take this as the assumed flagpole then it is currently forming virtually a very tight Flag pattern similar to Versatile. If there is volume breakout at 1.33 & it breaks out of the high of 1.38 then both Iris & Versatile will move up strongly in tandem and may be market leaders in the next few days.

The question is whether Versatile leads or Iris, though it seems Versatile is doing so based on the breakout on 10 July.

Versatile is a buy with a cut loss if it goes below 0.875.