Languishing Admedus (AHZ) – A Chart Review

By Kenneth Robson on June 10, 2015 • ( 1 )

Admedus heads south

Some technical observations;

In the past 10 months, Biotech stock Admedus has been in a steady down-trend.
Those who did not sell have been rewarded with a new issue of shares at 7 cents.
The share-price in the past three months has languished further, falling to support at the 7 cents issue price, despite the new issue being fully subscribed.
During this time there has been a sustained increase in volume of shares traded, and the RSI has hovered near the over-sold zone.
In the last week the share-price has fallen through support to a low of 5.7 cents, threatening to reach 5 cents, the price of an earlier capital raising issue.
The candlestick for today is known as a Doji, where the open and closing prices are the same. Such an appearance suggests buyer indecision, and often warns of a change in trend.

Inferences

Admedus has been managed competently and is well advanced in the manufacture and distribution of its lead product CardioCel not only to repair congenital heart defects, but also for the repair of Dural defects in Neurosurgery, and for repairing vascular defects in strokes and vascular injuries. The intransigence of the share-price seems inexplicable. A likely explanation is institutional accumulation of stock using judicious short selling as a technique to increase liquidity. Retail investors are well advised to not buy stock in a falling market. However holders of stock should avoid desperation selling. Large shareholders will be only too happy to soak up their shares cheaply if they sell now.