Global Digital Solutions, Inc. (OTC Pink: GDSI) has been a strong performer thus far in 2019. GDSI started off 2019 trading at $0.005, before hitting a high of $0.034, and now trades in a tight range of $0.015 and $0.02. This gives the company a year-to-date return of over 265%, through March 12, 2019. The strong early surge has caused the stock to understandably trade sideways for several weeks. However, according to technical analysis, GDSI’s rally could resume soon.
GDSI: A February to Remember
The Florida-based security and technology solutions company saw its stock soar from around $0.0075 to its high of $0.034 over a four-day period (February 7-11, 2019), thanks to operational progress and filings. While it is normal to have seen a bit of a pullback after such a massive run over a short period of time, it is particularly impressive to see that GDSI has not seen a major plummet. The stock has continued within a tight range since pulling back from its highs of the year. This is encouraging, as it shows that there has not been a large “rush to the exits,” which are certainly commonplace in the microcap world.
Chart: “Golden Cross,” Stochastics Entering Oversold Territory
Turning to Global Digital Solutions’ stock chart, we can see the massive surge in early February and the subsequent over-valuation that requires a natural pullback. At the height of the surge, the Relative Strength Index (RSI) was over 90, which indicates strongly over-bought conditions. GDSI’s RSI currently stands at a moderate 54, as of this writing.
In addition to strong returns, the rally also resulted in a “Golden Cross,” a major moving average crossover indicator for traders. A “Golden Cross” occurs when a stock’s 50-day moving average value increases beyond its 200-day moving average value.
Stochastics can be another indicator to help determine the momentum of a security. Traditionally-speaking, on a 0-100 scale, overbought conditions are considered between 80-100, which undervalued is seen between 0-20. GDSI currently sits just on the edge of undervalued at 22.60, as of this writing. This shows that Global Digital Solutions’ downward momentum could be reaching an inflection point.
Overall, searching for companies with strong fundamentals and technical has shown to be an overall successful strategy. Global Digital Solutions continues to make strong progress with operations, which can be seen with its recently completed acquisition of HarmAlarm, an aviation technology company. In addition, the company continues to press forward with its lawsuit against Rontan and its controlling shareholders.
Despite the recent sideways trading, the technical analysis shows some positivity for traders. The “Golden Cross” is a major indicator that is largely watched by trading community. In addition, the stochastics show GDSI to be nearly undervalued and ready to potentially reverse course. Additional news could be an important catalyst to help ignite the rally, but GDSI’s chart definitely is an important one to keep on your watch list.
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