MicroStockProfit

GNBT has been around forever in the pennystock world.  It has been touted as the next Nasdaq stock (or a piece of crap that is going to zero) in the time that I have been watching it.

It definitely isn’t going to zero, but right now traders and investors are down on GNBT…..for good reason.

Generex Biotechnology Corporation (GNBT) is a biotechnology company that is working on variations of its drug delivery systems for diabetes (and other illnesses).  Here is a link to their site if you want to do more DD.

GNBT has been trading in a range between $0.40 and $0.70 for the last 6 months.  Right now, it is trading at the bottom of that range.

I am not recommending that anyone “catch the falling knife” on this one, but I am thinking that GNBT is prime for a reversal.  For all of the negative press that GNBT has been receiving, the news that they have received a financing commitment is a positive indicator.  True, the financing is at a discount to GNBT’s current trading price.  But, the commitment is real and they have already drawn the first tranche.  It is composed of 24 tranches.  The financing guys are not stupid.  They want to be able to limit their exposure if things get worse for the company.

The negative press stems from the ever-irascible Adam Feuerstein of TheStreet.com, who called out GNBT and labeled them frauds.  The company responded with a $250 Million defamation suit.  I like MIchael Fizhugh’s article on SeekingAlpha.com about the whole mess.  Read it here.

The Chart

Clearly, GNBT is in a downtrend.  But, there is hope for a recovery.  In the last 5 trading days, there has been 3 high volume selling days BUT there have been two up days.  All the news is not bad.  It looks like buyers are trying to bid up the stock.  The oversold stochastics will exert some pressure for a bounce, but with the MACD still bearish, the stock could continue to fall for a while yet.

Watch for the MACD histogram to indicate that the bearish trend intensity is lessening.  Another indicator that I am using lately is On Balance Volume (OBV).  That indicator is telling me that the stock is still in distribution.

I am not qualified to pass judgment of GNBT’s drug portfolio.  I look at anecdotal information to give me some idea of whether this stock has a chance.  The financing is a huge indicator to me that GNBT will be around a bit longer.  The company has plenty of cash, low debt, great ratios….that will help them see this “crisis” through.   Any good FDA news and this stock will fly….Bad and the reverse will happen.

GNBT’s volatility is a great thing for short-term traders like us.

Trade with confidence,

Jeffrey Dean, Editor

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither MicroStockProfit.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Time might be right to take a look at NVAX again.  The stock was a 30 cent penny stock in March of this year and hit a high of $7.79 on September 1st.  Right now it is trading at almost half that number ($3.96).  THE QUESTION IS, “DOES IT HAVE ANY MORE LEGS”.  I don’t believe that it will have a 2,500% gain like it did from 30 cents to almost $8, but I think it might have a nice gain or two in it.

Several factors could make NVAX a winner again, as follows:

News - What caused NVAX to jump in the first place?  News about Swine Flu and NVAX was lumped in with all of the swine flu stocks and took off! Now that we are approaching flu season….what is to say that we won’t get a fresh set of news about the epidemic that could set NVAX off again.

The Chart - People have been so busy selling shares that they haven’t realized that they might have set NVAX for a bounce.  Be careful, here, though – the unhappy people that bought into NVAX in its rise will be selling shares into any spike in price.  That may shorten or reduce the length and severity of any spike.

Let’s look at the chart:

Volume is still strong (daily average of over 8MM shares traded).  the MACD is still bearish, but the angle of the bearishness is slackening.  The stochastics indicate that the stock is in an oversold position.  The Accum/Dist is still showing distribution.

I suggest watching the key indicators to see if NVAX declares its intentions.  It may go down for a day or two more, but watch for the bounce.  Definitely put this one on your trading radar.

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.