Avivagen Inc. (VIV:TSX.V) is an interesting company because it makes farm animal feed that is free of antibiotics, which is becoming a hot topic now that over half of China's swine herd is set to be killed due to a massive outbreak of African swine fever, an illness that may be made much more prevalent by the widespread excessive use of antibiotics, to which diseases like this develop resistance.
We had traded Avivagen well on the steep rise out of its early 2016 lows, but then our luck ran out when we bought it back early in May at the point shown on its six-month chart below—too early in the event, as it ran off sideways/down into a longer reaction that now looks to have ended with the double bottom that formed in August and September. While the action from the August low strongly suggests that the correction is over, it has yet to gain any serious traction.
However, it looks like it should do soon, and thus the reactions of the past couple of weeks look like the stock has thrown up a good entry point, especially as the accumulation line has shown strength during it.
On the three-year chart, the surge on very big volume early this year certainly looks like a breakout, especially given how both volume indicators also spiked higher and have barely dropped as the price has since corrected back. This suggests that this reaction is simply a correction to the preceding sharp rally that will, in due course—and perhaps soon, be followed by another up-wave. We can see the proximity of quite strong support that should put a nearby floor under the price, and how it is not far off breaking out of the downtrend—and also how, if it succeeds in doing so, it should accelerate to the upside if it can break above the resistance in the CA$0.70 area.
On the long-term 18-year chart, which shows the entire life of the stock, we can see how the price is not far above strong support at multiyear lows. With the strong volume pattern and volume indicators suggesting that a new bull market is incubating, this looks like a good point to accumulate the stock. Avivagen trades in very light volumes on the U.S. OTC market, where, for this reason, it should be avoided.
Avivagen Inc. website.
Avivagen Inc. closed at CA$0.57; $0.453 on 4 October 2019.
Originally posted on CliveMaund.com at 9.10 p.m. EDT on 6 October 2019.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
Read what other experts are saying about:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Avivagen. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Avivagen. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports (including members of their household) own securities of Avivagen Inc., a company mentioned in this article.
Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.