The global food chain disruption has continued this week. With sanctions on major grain providers like Russia, food and ingredient stocks are heating up. RiceBran Technologies (NASDAQ:RIBT) has caught our eye after a significant move since the start of the year. Over the last two months, RIBT stock has jumped from under $0.30 to $0.77.

Food shortage

The affect that Russia’s invasion has had on the food chain is not light. The widely accepted idea of a cost-of-living crisis does not begin to capture the gravity of what may lie ahead. António Guterres, the UN secretary general, warned on May 18th that the coming months threaten “the spectre of a global food shortage” that could last for years.

What would this mean for RIBT? RiceBran Technologies provides nutritional and functional ingredients that come from rice and grains. The company processes these grain products with extended shelf-life and higher nutrition in mind. Rice prices and food prices, in general, have been on the rise. RiceBran recently began its expansion of its milling capacity accounting for additional demand. “The demand for regionally-sourced ingredients and agricultural products is soaring given the uncertainty of the geopolitical environment and challenges in the global supply chain, and we are able to respond,” said RiceBran Chairman Peter Bradley.

What about the chart?

Along with a great catalyst to keep sending the share price higher, RIBT has a great chart setup.

The price made the latest leg up after holding above support of $0.403. Strong buying volume fuelled the price back up to resistance of $0.63. The price broke through and now sits in a new area of consolidation, between $0.63 and $0.76. While the price is still in this range, any dips to the lower side of the area are good entries.

If this latest resistance breaks (I believe it is more likely a “when it breaks”), short sellers will cover and this could create enough momentum to take the price above $0.90.

Chart provided by TradingView

Overview

In a choppy market, small caps don’t often provide as many opportunities as other market conditions. However, I think RIBT offers a great swing trade as the global food crisis continues. The market cap is about $40M, with a float of roughly 50 million shares.

Please read our full disclaimers regarding the information published. The above is intended for informative purposes only and should not be taken as investment advice. Trading on leverage can result in losses larger than your initial deposit.

One thought on “RiceBran Technologies is a Gem Small Cap Stock”
  1. […] my June pick, I am going with a stock that I recently wrote about, RiceBran. I usually go for smaller caps which provide much higher rewards but are accompanied with larger […]

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