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  • NGSX - raises needed capital and looking more positive  0 comments
    Aug 1, 2011 7:45 AM | about stocks: NGSX
    During late July NGSX had anounced it has come into agreement for the raising of some $20mm in fresh equity capital at a price of $1.65/share (with some warrants having an exercise price of $1.72).
    While the fresh capital came in at an expensive price tag (very low market price) - it was essential to clear the way going forward so the compnay has enough cash at hand to keep financing its ongoing clinical trials as well as pushing its marketing efforts for its existing approved drugs.

    On the selling insiders front, it seems that Sphera funds consistent selling of its holdings since earlier this year (Feb, March) has been virtually completed - we might see the last filing this week if they took advantage of the rally last week.

    NGSX certainly differentiated itself from the rest of the market (especially the small cap market) last week and has gone up VERY nicely on much stronger than usual volumes - bucking the trend lower (down over 5% for the Russell 2000) and finishing the week UP some 43% !!
    The encouraging fact is that this significant rise has been accompanied by strong volumes much higher than the average daily volume.
    I suppose much of the volume has been attributed to short covering either from people who fore-sold shares in anticipation of some kind of a dilutive deal , or people who speculated the company will not be able to raise money at all and might get into liquidity problems.
    Now that the liquidity issue is off the table (at least for 6 months or so, the stock is primed for a significant bounce higher from here on any good positive news regarding its clinical trials and/or sales during the upcoming quarterly report.
    The move above $4 around mid-June (granted it was short lived and enabled Shpera to further reduce its holdings) serves as a beacon to the potential hidden in this stock and now that Spera funds have practically completed their sales, the supply at higher prices seems quite limited, hence making strong moves higher more easier to achieve.
    On the technical front, NGSX broke its 50 day moving average higher last week and the $2 level should start serving as a sort of a support level again.
    Interestingly enough the $4.25 level or so rests around the 200 day moving average and that would serve as a short/intermediate term resistence line replicating the level NGSX reached mid June when its very strong short lived rally fizzled.
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