Allo Admedus!

In the words of Alice in Wonderland, it all gets “Curioser and Curioser”. Admedus is a fledgling healthcare stock on course to make its mark globally, but the market is unconvinced that this will happen anytime soon. Time and again, reports of product and marketing advances scarcely stir a ripple in the market. It is the opposite story to the ” Boy who cried Wolf”. Each time it is just another false start; but perhaps one day it won’t be.

In the past trading week this response escalated to a new level. There has been a growing expectation  that 2016 will see further substantial progress in the marketing of the versatile xenograft material CardioCel. In addition, there has been an impatient build-up of public expectation of a break-through by Professor Ian Frazer in his research of therapeutic DNA vaccines for genital herpes and for cervical cancer. His research is time-consuming and painstaking. It cannot be rushed. Assessments must be objective and free of bias, and the results can not be predicted.

AHZ Dy Mar1 16

The daily candlestick chart above as at March 1, 2016 shows that support at 60 cents was broken the previous week. This has been now followed by a trio of large negative candlesticks, eroding the share price by 30%, closing today at 41 cents. It was a focused shorting attack on a share-price that was already falling, with no explanatory company announcement.

On the contrary, there has been a glowing write-up by by Cayla Dengate today in HuffPost Australia about the prospects for Professor Frazer’s immunotherapy research.

All market watchers will be well aware how often market responses vary from what might logically be expected. Thus a satisfactory profit result could be greeted with a fall in the share price if the market had been expecting more or future growth prospects were limited. On the other hand market forces alone may determine the direction of price movement.

One possible explanation could be speculation as to unfavourable results of the current vaccine trials.

Another factor could be institutional shorting, disadvantaging retail investors. This could shake their confidence in a fair and orderly stock exchange.

It is to be hoped that further clarification will be made for our benefit.





Categories: Chart Review, Company review, Investment, Trading opinion

Tags: , , ,

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