It's Time for This Stock to Rebound.... Hard.
Don't know if you've noticed this or not, but we've been on a hot streak lately. Our U.S. Precious Metals (OTC:USPR) pick from December 1st - when it was trading at $0.16 - has been as high as $0.298 since then, and you could have easily gotten out with gains anywhere from 31% to 81%, depending on when you sold. We've also been telling you about Rite-Aid (NYSE:RAD) for a few weeks now, but really pounded the table back on November 25th when shares were at $1.10. Sure enough, RAD hit our targeted level of $1.38 yesterday, translating into a quick 25% move for those who heeded the advice. Even erratic VirnetX Holding (AMEX:VHC) has advanced 6.0% since we dissected the breakout effort from December 19th, and it's still going strong.
Point being, we've been nailing these entries and exits.
Well, good news for you... we've found what looks like an ideal entry area for another small cap name - ChromaDex (OTC:CDXC).
CDXC Ready to Roll
This Featured Stock has been a little lethargic up until recently. Part of that stemmed from limited news, and part of that was just the time of year. That doesn't mean things haven't been happening for ChromaDex shares though. They have been. You just have to look for the off-the-radar clues that the tide is turning. We got one of those clues on Friday, while most trades weren't watching.
We've mentioned this before but it bears repeating now - volume spikes generally indicate pivot points for a chart, both bullish and bearish.
More often than not, a surge in volume after a strong rally means the last of the amateurs are pouring in, chasing performance. As you probably know though, that's when the smart money starts to migrate out because these folks can easily sell into that heavy buying. Once the stock tips over just enough from that new selling pressure, the same amateurs who were chasing it higher end up scrambling to get out too.
It works the other way as well, meaning an unusually-high-volume day after a pullback usually means a capitulation of sorts... the last of the sellers have done their business, and the pendulum is ready to swing the other way since all the sellers have been washed out.
That's what appears to be going on with CDXC now. We saw volume surge to 396,393 shares on Friday (the highest volume in months), out of nowhere. No news. Not even a rumor.
What's it mean? In this particular case the heavy volume pouring in just a few days ago - after a fairly sizable dip - may mean somebody knows something, or somebody wholeheartedly believes something. And they know/believe it at a point when ChromaDex shares are just off of multi-month lows... a counter-intuitive decision, yet one I'm inclined to believe in. After all, whoever it was 'voted' with dollars; it's not like that much money is going to be thrown around indiscriminately.
Funny thing though - those buy-in messages can and often do prod a bigger reversal for a chart. I think we're going to see the same from the ChromaDex chart now.
All that being said....
Here's the Likely Reason
I can't help but wonder if what Friday's buyer (or buyers) were assuming was today's official company news. It was good.
While the company's BluScience supplement line has been getting huge traction since being placed on the shelves at GNC stores, let's face it - General Nutrition Centers are not the only great venue out there for the pTeroPure-based supplements. This morning ChromaDex confirmed it had entered an agreement with a national drug store chain, and the company expects the BluScience line to be found at another 25,000 stores by the end of the second quarter. (For reference, there are less than 8000 GNC stores.)
The drugstore chain itself wasn't named, but with 25,000 units, there aren't too many it could be. The chain is irrelevant though. The point is placement progress, and CDXC is making it. And as you probably also realize, the more stores that carry BluScience, the easier it is for ChromaDex to convince other retailers they should be carrying it too... the snowball effect.
I really think this is the beginning of some serious credibility for the company. That's a long-term theme though. I also think CDXC is a compelling short-term idea here, based on a combination of the chart-pivot marked by the volume surge and a clear reality that retailers want the product on their shelves.
And along those near-term lines, with or without today's announcement I find it interesting that the buying volume (accumulation) has been decidedly increasing since early December while the stock was testing lows around $0.50. This tells me the bullish interest has actually been there the whole time. All we needed was a catalyst like today's news.
Speaking of, here it is.
ChromaDex(r) Announces Expanded Retail Distribution for its BluScience(tm) Line of Dietary Supplements at a National Drug Store ChainBluScience expected to be available in 25,000+ retail stores by year-end 2012 IRVINE, Calif. , Jan. 10, 2012 /PRNewswire/ -- ChromaDex Corporation (OTCBB: CDXC.OB - News), an innovative natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food and beverage, cosmetic and pharmaceutical industries announced today that its BluScience line of dietary supplements is now available for sale in one of the largest retail drug store chains with more than 8,000 stores throughout the United States . This national chain will be carrying two BluScience SKUs (HeartBlu and EternalBlu) by the end of Q1 2012 and two additional SKUs (MemoryBlu and Blu2Go) by the end of Q2 2012. This marks the first rollout of BluScience into retail mass merchants since the initial launch of the product at GNC. The novel ingredient in BluScience is ChromaDex's proprietary, patent-pending pterostilbene, branded as pTeroPure(r), which was named the 2010 North American Most Promising Ingredient of the Year by the independent research company, Frost & Sullivan. pTeroPure is a proprietary, nature-identical formulation of the antioxidant compound pterostilbene, which is found naturally in blueberries. Pterostilbene has superior biological activity, better oral bioavailability and metabolizes more slowly in the body than other polyphenols, allowing more time for its antioxidant activities to act. Along with a number of other effects, pterostilbene has shown great promise for supporting cardiovascular health, cognitive function and anti-aging. However, the amount of pterostilbene present in a typical serving of blueberries is a tiny fraction of the amount needed to realize its benefits. In fact, one BluScience capsule has the equivalent amount of pterostilbene as contained in more than 500 cartons of blueberries. Commenting on the announcement, Ann Deren-Lewis , Vice President of Marketing of ChromaDex, stated, "This additional retail distribution will complement the existing availability of BluScience at GNC. Given the favorable response we are hearing from mass merchant retailers, our goal is to have BluScience available at more than 25,000 retail outlets by the end of 2012. The Q1 national rollout of the product is being matched by a comprehensive television, print and online advertising strategy with a focus on developing education and awareness around the benefits of both pTeroPure and our BluScience line of retail products." About ChromaDex: ChromaDex, Inc. is an innovative natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food & beverage, cosmetic and pharmaceutical industries. The company has an impressive pipeline of new ingredients, including its pTeroPure(r) pterostilbene for which it has worldwide, exclusive patent pending rights. The Company recently launched its BluScience(tm) line of dietary supplements. Capitalizing on the diverse potential applications of the product, ChromaDex is also developing pTeroPure for the skincare and pharmaceutical markets, among others. pTeroPure is currently being studied in a human clinical trial at the University of Mississippi . For more information about pTeroPure visit www.pteropure.com or call 949-600-9694. Forward-Looking Statements: Any statements that are not historical facts contained in this release are forward-looking statements. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements involve risks and uncertainties, including but not limited to those relating to product and customer demand, market acceptance of our products, the effect of economic conditions both nationally and internationally, ability to protect our intellectual property rights, impact of any litigation or infringement actions brought against us, competition from other providers and products, risks in product development, our ability to raise capital to fund continuing operations, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made except as required by law. Investor Contact: Liviakis Financial Communications, Inc. Institutions and Analysts Contact: The Del Mar Consulting Group, Inc. BluScience Contact: Ann Deren-Lewis *These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease. |
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