Just when Admedus shareholders were starting to smile again, the grin was wiped off their faces by the announcement of another capital raising on the 10th May 2018.
The share price, after reaching an anticipated 38 cents, plummeted that day to 31 cents, as shown on the one year, daily chart below. To add to their consternation a further sell-off to as low as 26 cents followed after the new SPP shares were allocated on the 4th June 2018, rewarding participants who chose to abstain from the SPP in order to pick up shares on-market.
They may however miss out on acquiring a significant holding at these bargain prices of an outstanding healthcare prospect by doing so, if present shareholders refuse to sell-out at a loss, or to forego a reasonable profit on their investment.
The following technical features suggest there is more potential for a rebound in the near future than decline to the long-term support level at 20 cents/ share.
- Precipitous movements either up or down are often followed by a corrective move in the opposite direction.
- The RSI has in the course of the capital raising, fallen from an over-bought level to bordering on being over-sold.
- There has been a spike in volume which may have been created by a combination of short-selling and institutional accumulation.
I am a long-term shareholder in Admedus, and am currently over-weight in my position. I have a qualification in technical analysis, but not in financial advice, so readers should seek other opinions before investing.