This week we turn our attention to Nyrada (ASX:NYR), which finds itself in the business of developing novel, small molecule drugs to treat cardiovascular and neurological diseases.

Their words, not mine, but all the same a novel space in which to play and not without grand rewards should their applications progress.

The chart is certainly progressive, and all of this whilst the second tranche of their recently announced $11m placement is yet to be finalised.

Two-tranche placements are a fantastic test of the underlying demand for a given equity. All too often, stocks can’t get off the mat until the second tranche has been squared away, the market knowing that it is yet to come, and dare I say it management also.

In the less likely event that the stock manages to rally irrespective of a second tranche to come, even if that second tranche is smaller than the first as is the case here, it tends to signal an underlying demand for the stock that is worth taking note of.

Whilst the exact timing of the second tranche for Nyrada is likely to be May but as yet not exactly known, we do know that in quantum it is around one third of the total placement size.

Today’s price action to a close of 36c up 4c on the day represents a lovely, crisp break higher after a consolidation within the context of recent price action across 30c, in keeping with an up-trend line that can be seen in the below chart in black, and beginning toward the end of last year.

NYR asx
Chart of the day – Nyrada NYR

In the event that 30 to 32c is able to hold in coming weeks and through the second tranche ( the placement having been priced at 26c ), current price action would suggest that a re-test of recent highs at 44c is entirely on the cards.

A market cap in the order of ~$50m is not onerous either. There’s room to move here.

This is a holding within the IMA as operated by Collette Capital, and at least for now the price action tells us that’s exactly where it should stay.

 

Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.

Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.

The Collette Capital Wholesale IMA Strategy has returned +24.57% p.a. net of all fees as at the end of February 2021 since inception in January 2015 (using the Time Weighted Return method of calculating returns).

Learn more at www.collette.capital

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