English: Professor Ian Frazer at 2008 Olympic Torch relay in Commonwealth Park Canberra (Photo credit: Wikipedia)

The share-price of Allied Healthcare when reviewed in “Technically Speaking” February 23, 2013, was $0.026, on the brink of a break-out above a trading range. The Fibonacci retracement tool suggested target prices of $0.0456 (38.2%) and $0.055 (50%).

Allied Healthcare was then seen as a biotech stock which could reward investors, having an existing cash flow, and  a product (CardioCel) that had been developed over a ten year period of careful research, and was showing promise in clinical trials. It has been awaiting regulatory approval in Europe and the USA  as well as in Australia.

Could be about to break-out from its trading range

The wild-card sector of AHZ however is its sponsorship of Professor Ian Frazer‘s DNA vaccine research on Human Papilloma Virus, and Herpes Simplex Virus. Such vaccines, responsible for cervical cancer, and herpes respectively, depend on cellular immunity, and it is hoped, may be able to eradicate the virus from the body.

Allied appeared to be on the brink of transition from venture stock to a viable profitable healthcare business; one which might achieve this in 2013-4.

Target price achieved. ? More gains to come.

In the five months since then the share-price doubled from 26 cents to 52 cents now.

Share price in a symmetrical triangle. ? second leg rise to 9.2 cents to come?

TA observations as at July 21, 2013:

• Uptrend intact on the weekly chart.

• AHZ  paused from trending following an issue of new shares to executives I understand at 4.8 cents. Prior to this the price peaked at 6 cents before falling back to the low 5 cent zone. There seems to be good buying support in a 4.9 to 5.3 cent range. This augurs well for a further leg higher.

• The recent pause in trending, formed a symmetrical triangle pattern from which break-out could occur in either direction, but is more likely to be to the upside.                                                                                                                                                                                                      
• The first leg was from 2 cents approx. to 6 cents, so the second leg might be from 5.2 cent support to 9.2 cents which happens to be near an analyst suggested target.                                                                                                                                                                                                                                
• The 100% Fibonacci retracement level is at 95 cents.

• This level could be attained in about 6 months.

• A stop/loss position should be set at about 4.5 cents, in case breakout is to the low side.

Conclusion

In my opinion, investment is still likely to be profitable, and the share-price could double again to between 9 and 10 cents. Please do not construe this personal view with a recommendation to either buy or sell shares in Allied Healthcare.

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• Herpes Vaccine Clinical Trial To Begin In Brisbane (asianscientist.com)
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• This Week in Biotech (fool.com)
• Hope for prevention of herpes through new vaccine (heal-herpes.com)
• Gene-Eden-VIR Against Co-Infection with Latent HPV & HerpesViruses; polyDNA Announces Campaign to Educate Doctors (heal-herpes.com)
• $350M batch of biotech IPOs to test investors’ appetite for risk (fiercebiotech.com)
• Biotech Investing for Beginners (fool.com)

Categories: Chart Analyses, Technical Analysis, Trading opinion

Tags: Cervical cancer, DNA vaccination, Herpes Simplex Virus, Human papillomavirus, Ian Frazer