AHZ – Healthcare bargain?

10 year weekly candlestick chart for Admedus

The chart above, supplied by Incredible Charts, shows an unrelenting decline in the share-price from a high of $1.80 soon after a 10 for 1 share consolidation, to a current wealth-destroying price of 6 cents for long-suffering shareholders.

However, should an upgrade in company earnings be reported in the upcoming reporting season, the stock could be re-rated substantially higher.

Admedus has outstanding growth prospects with a range of innovative products being marketed globally, but a number of rights issues each pitched at a substantial discount to the market, has been a massive drag on the market-price.

12 month daily candlestick chart for Admedus from Metastock.

12 month daily chart of Admedus

Despite the catastrophic fall in the share-price, I consider that there are technical features which may point to future gains:

  • Recent trading indicates support for the share-price at 6 cents without the free accompanying company option that accrued to share-holders who took up the rights issue at 8 cents.
  • At its present record low price, it would seem the risk of further falls is outweighed by the likelihood of a rebound in the share-price.
  • The RSI is already trending upwards from being deeply into the over-sold zone, and may soon penetrate into the customary trading range.

Retail investors reading this post should recognize that Admedus is a speculative investment, and that bringing even such promising enterprises to fruition is a long-term task. It is important therefore for potential investors to discuss with their stock-broker whether or not it is suitable for them.

Categories: Chart Review

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