Chart Review – Admedus (AHZ)

ahz-sep16ahz-wk-sep16

What the charts don’t disclose!

Charts do not lie. They are objective. They reflect market perceptions, but do not disclose the myriad of influences determining that sentiment, nor do they necessarily impart a balanced view of the chances of ongoing success or failure of the security.

The upper chart is a daily chart of emerging Healthcare stock Admedus. The plot is heavily weighted by a further capital raising at 33 cents raising $10 million in placements, and a $8.3 m renounceable 1 for 9 retail rights issue.

The second chart is a 4-year weekly one from Metastock showing a persistent downward trajectory of the share price from its high. The downtrend reflects the effect of a number of capital raisings at about 9 month intervals.set at substantial discounts to the existing market price

The current price, following the 1 for 10 share consolidation a year ago, is perilously close to its all-time lows. On technical grounds, failure of price support at about 30 cents would be a stop-loss signal, with the possibility of a further decline to next support at about 15 cents.

Growth prospects for Admedus

I wish to emphasize that I am not a financial adviser and so am not able to pass judgment on the future prospects for Admedus. However, several of my previous posts have discussed the company’s promising research, growing manufacturing activity, and expanding global sales. Those contemplating investment should do their own research and seek guidance from a qualified financial adviser, taking into account the speculative nature of their investment, and the current down-trend.

Personal strategy

With a medical background, I am of the view that Admedus has outstanding long-term growth prospects, but concede investors need to be patient to see it meet its full potential.

My objective has been to  regularly realize profit, and to short-sell existing shares from time to time when there is evidence of market weakness.  My intent is to gradually build my holding and at present my realized profits still exceed my realized losses.

Would I recommend this approach to others? No. But I would encourage readers to at least include the stock on a watch-list, and to look for the emergence of a long-term uptrend.

 

 

 

 

 



Categories: Chart Analyses, Technical Analysis

Tags: , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: