Comvita - CVT

[Phaedrus]

From what I see we have had in the past couple of days type 1 and 4 buy signals

There have been four recent Buy signals - one each of Types 1, 3, 4 and 9.

..... which have been countermanded by overbought warnings

A stock reaching OverBought levels does not countermand previous Buy signals and neither does it constitute a warning. Uptrending stocks often spend considerable periods of time at technically "OverBought" levels and these simply mark bad times to buy. When stocks are trending up, oscillators give good entry signals and a string of misleading "Sell" signals. With falling stocks, oscillators give a string of misleading "Buy" signals but useful Sell signals. In short, never act on any oscillator signal in isolation.

....then why it is a hold?

Because it is in an uptrend.
Because that uptrend is supported (confirmed) by a rising OBV.
Because price action is above a confirmed trendline.
Because there have been no Sell signals.

[Paint it Black]

There have been four recent Buy signals - one each of Types 1, 3, 4 and 9.

A stock reaching OverBought levels does not countermand previous Buy signals and neither does it constitute a warning. Uptrending stocks often spend considerable periods of time at technically "OverBought" levels and these simply mark bad times to buy. When stocks are trending up, oscillators give good entry signals and a string of misleading "Sell" signals. With falling stocks, oscillators give a string of misleading "Buy" signals but useful Sell signals. In short, never act on any oscillator signal in isolation.

Because it is in an uptrend.
Because that uptrend is supported (confirmed) by a rising OBV.
Because price action is above a confirmed trendline.
Because there have been no Sell signals.

Thanks again Phraedrus - if the SP continues to slowly rise, as it would with a series of positive announcements, is there a point where the overbought line on the top 2 charts rises to a point where it overtakes the SP which then clears the way for the SP to be at last considered a buy?

[Phaedrus]

If the shareprice continues to slowly rise, is there a point at which the RSI and Stochastic oscillators as shown here will give another Buy signal?

No. At this stage, they have already done their job. To generate new Buy signals, these oscillators would have to drop below their "OverSold" threshold and then climb above it. This would require a reasonably significant drop in the shareprice followed by a rise.

Very active traders might well want more frequent entry/exit signals. They could use the same oscillators but utilising shorter time periods than those shown here. A fast Stochastic oscillator could use a 5 day period, for example. The default RSI period is 14 days, but use of a 9 day period gives a Buy signal in tandem with that of the Stochastic oscillator, giving an entry at $1.16. The time period controls the sensitivity of the indicator. The idea is to select a period that suits your preferred trading frequency.

[Paint it Black]

If the shareprice continues to slowly rise, is there a point at which the RSI and Stochastic oscillators as shown here will give another Buy signal?

No. At this stage, they have already done their job. To generate new Buy signals, these oscillators would have to drop below their "OverSold" threshold and then climb above it. This would require a reasonably significant drop in the shareprice followed by a rise.

Very active traders might well want more frequent entry/exit signals. They could use the same oscillators but utilising shorter time periods than those shown here. A fast Stochastic oscillator could use a 5 day period, for example. The default RSI period is 14 days, but use of a 9 day period gives a Buy signal in tandem with that of the Stochastic oscillator, giving an entry at $1.16. The time period controls the sensitivity of the indicator. The idea is to select a period that suits your preferred trading frequency.

Excellent Phraedrus - that's what I needed to get understand this properly.

[tango]

I bought into CVT ages ago about 102, then the price dropped to 82 cents so I ended up buying more to drop my average cost. There are times I worry they don't have the financial resources to develop and market all their products

[snackpack]

Seems CVT have signed off on the agreement for Derma to make and market Medihoney. CVT still retain the right to sell to non-medical professionals and are suppliers of Manuka Honey to Derma. All subject to Derma capital raising. CVT to gain $3.2 mil cash and $2.8 mil of Derma shares. CVT gets on-going royalty too anticipated to be about $500k in 2010/11.

[tango]

Seems CVT have signed off on the agreement for Derma to make and market Medihoney. CVT still retain the right to sell to non-medical professionals and are suppliers of Manuka Honey to Derma. All subject to Derma capital raising. CVT to gain $3.2 mil cash and $2.8 mil of Derma shares. CVT gets on-going royalty too anticipated to be about $500k in 2010/11.

I think that's very promising, but it seems to be a lousy time to do capital raising

[snackpack]

CVT rising steadily (jumped today 12 cents) to $1.72 albeit on very low volume. Lack of liquidity making the shares scarce? Any ideas why going so high so quick?

[kiwi_on_OE]

Regarding price increase, could it be related to figures from half yr profit?

6 months to 30 September 2008
NZ$000''s
Sales 31,650
EBITDAF(i) 2,036
NPAT (ii) 203

6 months to 30 September 2009
Sales 40,108
EBITDAF(i) 4,258
NPAT (ii) 1,621

Simple doubling of 1st half figures could give FY NPAT of 3.2M.

Prev 2nd half sales 40m, could current 2nd half sales be 50m? EBITDAF 6m? NPAT 3m? Could some think FY NPAT could be 4.6m?

Current year only has two months left to run. What about next year? Base a guess on double proposed current half figures ie. sales 100m, EBITDAF 12m, NPAT 6m?

Mkt Cap ~50m, so current yr PE 11, next yr PE 8.

If anyone believed figures like those I could see why they were buying and the price was rising.

[snackpack]

Comvita and Derma Sciences have formally signed their agreement so the share and option issues and cash are heading Comvita's way.