NanoViricides Inc. (NNVC)

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Liquidty Evaporates in NNVC limit book

For those with access to the information take a look at the order sizes above and below the market in NNVC.

A colleague with access to the information - I don't - has created a liquidity measure that takes into account limit orders to sell above the market and limit orders to buy below the current market. It takes into account the size of each visible order and it price distance from the current price. Sometimes buy or sell signals can be derived from imbalances. There are none at the moment.

What is of interest now is the dry up of in liquidity both above and below the current price. This does not predict price direction but it offers clues to the magnitude of a move once it begins. Low liquidity = large sized moves.

The current technical picture is somewhat tilted to the downside. A full-fledged sell signal requires a close below 1.45. With liquidity as low as it is now anxious sellers will need to offer stock at considerably cheaper prices to attract enough trading volume. Price targets in the 80-90 cent range can be read from the P&F charts and other methods from standard charts.

The caveat for the bears is a major positive news event, as unlikely as that may seem. With 2.2 million shares short, down from 2.5 million, that is still 36 days average trading volume. If NNVC can announce something viewed as substantial material progress the stock can go to 3 easily and possibly to 5.5. The lack of liquidity implies that expectations are low so it may not take a major leap forward to trigger a short-squees.

The caveat for the bulls would be a September report/CEO letter that indicates no real progress. Sellers will be hard pressed to find buys until prices go substantially lower. My bet would be on this outcome but with NNVC one never knows.

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