The Female Health Company setting up a trade

Oct 16th, 2015 – 1 Comment

Could run to $2.50


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FHCO LOGO

Hi Lou,

Please give me your thoughts on the Female Health Company. If possible, I’d appreciate your input on both the fundamentals and technicals.

Long time fan,

Rob

 

Hey Rob,

Thanks for the assignment and your support! Both are very much appreciated. The Female Health Company (FHCO Nasdaq) owns certain rights to the FC2 female condom which is approved by the FDA and cleared by the World Health Organization. The FC2 provides protection from unwanted pregnancy and the transmission of HIV/AIDS .

FHCO markets the FC2 to large global agencies, NGOs, and government institutions. Given their customer base FHCO experiences variances in cash flow with large orders providing peaks in sales followed by intermittent periods with low demand.  The market cap for the company is $57.75 million which makes it a candidate for the speculative segment of your portfolio.

I will inspect the charts for FHCO but will leave the fundamental analysis to others.

 

 

FHCO

The-three year chart depicts a stock that has been struggling with an established downtrend that started in October of 2013 when it topped out near $10.00. The death cross that surfaced in January of 2014 signalled to the informed investor that they could expect an increase in selling pressure. What is also observable is the persistent resistance along the 50-day moving average into September of 2015.

The bounce off the 52-week low of $1.26 in August of 2015 has taken the stock through resistance along the 50-day moving average and is now testing resistance along the downtrend line.

 

 

 

 

 

FHCO2

The six-month chart highlights the break above the 50-day moving average and what appears to be the formation of a cup and handle which is a continuation pattern. From the evidence at hand FHCO has to be viewed as a speculation. Having said that it does appear that a trade is setting up. If your investor profile is suited to a higher risk proposition then you might want to catch a ride for a test of resistance along the 200-day moving average near $2.50.

The next time I will re-examine the case for Patient Home Monitoring Corp. (PHM TSXV) for James.

 

Make it a profitable day and happy capitalism!

Categories: Health Care
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