AVNR Hourly Chart - July 6, 2009
Normally, I hate chasing moves. Except in this case I am not displeased with my price entry point on a fundamental basis considering what is going on with the company. AVNR is a better company now than it was when it descended into the sub $3 range. An entry into AVNR was possible today at just a little over $2.
This is an event driven trade on my part, the event in the near future being submission of their binders to the FDA for Zenvia's approval. Technical analysis will be used on my part to determine if the stock is topping, in which case I may sell. I am not a believer of stop losses at present. I understand their necessity for those who trade on technicals alone, but since I value fundementals more, technical analysis is pramarily used to stop me from buying and selling at the wrong time. We'll see how this one turns out. If I've gotten my entry point totally wrong, I may make it a rule of mine to never ever chase ramping stocks.
Risk / Reward Analysis
Risk
I think $1.50 is the realistic low at this point in time considering current information available about AVNR. This would happen by increased selling that breaks below the $2 level, where the price declines to $1.50 and volume dies down. In this scenerio the news events in the future would ultimately drive price up or down, depending on their nature. (32% Downside)
Incredibly determental news could send this stock down to the $1.25 range fairly quickly, in which case I would exit the stock for fundemental reasons. (44% Downside)
Reward
$3 is a forgone conclusion if it continues to ramp at its present rate. (35% Upside)
Above $3 I believe to be possible, but perhaps not probable in the next few months. Though, since it could happen, it adds extra sweetness to the $3 I expect to get. The maximum I believe to be around $5, but who knows. Back in the day this stock hit $16 and like I said, it's probably in better fiscal health today.
Risk
I think $1.50 is the realistic low at this point in time considering current information available about AVNR. This would happen by increased selling that breaks below the $2 level, where the price declines to $1.50 and volume dies down. In this scenerio the news events in the future would ultimately drive price up or down, depending on their nature. (32% Downside)
Incredibly determental news could send this stock down to the $1.25 range fairly quickly, in which case I would exit the stock for fundemental reasons. (44% Downside)
Reward
$3 is a forgone conclusion if it continues to ramp at its present rate. (35% Upside)
Above $3 I believe to be possible, but perhaps not probable in the next few months. Though, since it could happen, it adds extra sweetness to the $3 I expect to get. The maximum I believe to be around $5, but who knows. Back in the day this stock hit $16 and like I said, it's probably in better fiscal health today.
Just a little side-note on this stock. I came across it at about 40 cents and it looked interesting at the time, but it fell off my radar because the endpoint of their phase III trials were so far away.
ReplyDeleteI just looked it up again recently and to my surprise it's up huge. Now, I wouldn't be a huge fan of this stock if it wasn't for Divest making the case for their drug candidates, and that a treatment for IEED could generate serious revenue considering there is no medicine that directly targets that illness.
Here's the conversation we had on Google's Finance section for AVNR. Divest's response is just below mine:
AVNR Discussion back in December
- Star Topline Data in August 2009
ReplyDelete- Star Open Label Safety Data in December 2009
- Submission to the FDA, April or May 2010
- FDA Answer November to December 2010