Through the half-way point of 2019, Avalon GloboCare Corp. (NASDAQ: AVCO) continues to show strong fundamental progress. In June 2019 alone, Avalon reported being added to the Russell 3000 Index, the completion of clinical-grade exosome bio-production standardization, early-stage of commercial launch for ACTEX platform, the appointment of Dr. Yen-Michael Sheng Hsu of Weill Cornell Medicine to its advisory board, and more.
Since the release of the fundamental developments, Avalon GloboCare Corp. has seen its share price surge back into the mid-$2.00 range. Despite these operational developments, the chart continues to show a lack of connection with the fundamentals. The issue started in late January 2019, just after the company reported its landmark discovery and development of the world’s first saliva-based exosomal biomarker for dual purpose as a diagnostic and therapeutic target for oral cancer.
The major discovery pushed AVCO into the stratosphere after launching from mid-$2.00 range to a new 52-week high of $13.50. Unfortunately, this was also when short sellers began to take notice of the company and helped pushed shares into a downtrend, as supported by short interest data.
However, the extremely oversold state combined with the flow of strong fundamental developments in June, could signal a more significant turning point for the bulls. Let’s dive into the raw data:
AVCO: Short Interest Lowest Since Early January 2019, Avg. Daily Volume at Multi-Month High
According to the latest short selling transaction data from June 14, 2019, short interest in Avalon came in at 143,393 shares; a decrease of 16.62% compared to prior data from May 31st. This was effectively the lowest short interest figure since before Avalon’s major landmark discovery in late January 2019. At the same time, average daily volume for AVCO came in at 184,634 shares, which was the highest reading since April 30th.
Days-to-cover (DTC) declined to 1, which simply means that it would only take one day for shorts to be able to cover their positions; a positive for shareholders and bullish traders. The prior short transaction data from May 31st reported DTC of 2.47 days. This was when short interest was at 171,979 and average daily share volume was at 69,661.
The next short transaction data for the end of June should be released in the next week or so and will be an important indicator to see how short sellers have been positioning since Avalon’s surge last month. Since hitting $1.77 mark in early June, AVCO has surged over 36%.
Technical Analysis: Despite Gains, Weekly Chart Still Showing Oversold Conditions
Avalon GloboCare had a strong June, but has seen some slight profit-taking prior to the July 4th holiday. This is certainly not unexpected after strong performance in June, but it does present a possible entry point for investors who have been watching and waiting for an opportune moment.
The technical analysis on AVCO’s daily chart corroborates the recent profit-taking, but does not violate the uptrend. Furthermore, the daily chart’s moving average convergence divergence (MACD) is nearing a potential cross above the zero line, which is a strong bullish indicator.
Avalon’s weekly chart continues to show the longer-term trend in a deep oversold state. Stochastics remain within the oversold region and the MACD continues to round-off and trend higher. The weekly chart’s 50-week moving average is currently at $3.21. This highlights some potential opportunity ahead.
Overall, Avalon GloboCare Corp. continues to make strides in its business operations, which finally caught up to short sellers in June, after the share price saw a notable rebound. The early July profit-taking was expected, but the technical and fundamental analysis seems to tell a much more significant under-the-surface outlook.
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