We took profits in Avivagen at the end of February because it had arrived at an important resistance level in a critically overbought state, and therefore looked set to react back or consolidate before further gains are possible. We resolved to buy it back later depending on what happened. We sold it at about 80 cents and today it dropped intraday to 67 cents, vindicating our decision to sell, but volume has been comparatively very light as it has reacted back these past 2 trading days, which is a positive sign, especially given the bullish strong volume on the preceding advance. This being so it looks unlikely that it will react back much further, and may not react back further at all. What is therefore thought likely to happen is that it forms a trading range here as shown on the latest 3-month chart below, perhaps for a few weeks, which will allow the overbought condition shown by the MACD indicator to ease, before it embarks on another upleg. Should this turn out to be the case then we are at a good entry point again here, because we are near to the bottom of the potential trading range. This is the reason that we went ahead and bought it back today when it was priced at 70 cents – not a huge discount from where we sold, but that 10 cent drop we saved is better off in our pockets than in the hands of Mr Market.
The email alert saying to buy it back was sent out today at about lunchtime, and read as follows…
“Avivagen Inc buyback alert
Avivagen has had 9 or 10% lopped off the price since we sold it at an overbought peak a couple of days ago, which we did because we don't like Mr Market walking off with our hard earned profits. However, the volume pattern was and is powerfully bullish - big volume on the advance, light volume on this decline, so it looks likely that it will turn up again shortly. It is suspected that it will rally soon from about here and then zigzag around forming another bull Flag or Pennant before taking off higher again. Therefore considered worth buying it back here, but don't pay more than 73 cents at this juncture. Chart for now will be posted on the site later.
Avivagen Inc, VIV.V trading at 70 cents at 10.33 am EST.”
Avivagen Inc
website
Avivagen Inc, VIV.V, CHEXF on OTC, closed at C$0.71 (bought back at C$0.70), $0.603 on 4th March 19.
Posted at 8.45 pm EST on 4th March 19.