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Old 11-17-2009, 08:55 AM   Nav to Top  #1
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Arrow Bullish Technical Breakout Alert (OTC:SNBP.OB)

Miv Investments Inc. has initiated an independent bullish technical trading alert for 11/17/09 on Sinobiopharma, Inc. (OTC:Investments Inc. has initiated an independent bullish technical trading alert for 11/17/09 on Sinobiopharma, Inc. (OTC:SNBP.OB). Shares of the company finished the day at $0.25, up 38.89% from the opening bell on heavy buying pressure. The turning point in the share price which had been experiencing a down trend for well over a year, resulted from record volume totalling 2,911,677 which trumped the volume average of 265,000. BioMedReports has also published a technical alert.

Investors have begun to feel a renewed sense of optimism towards the company on the eve of their recent press release. Sinobiopharma announced that 23 generic drugs for which the Company has production rights are listed in China’s National Essential Drugs List, which covers pharmaceuticals used to treat up to 80 percent of the most common diseases in China.

According to the Chinese government’s healthcare reform plan, 90 percent of China’s citizens will be covered by a universal healthcare system by the year 2010. Under the plan, drugs on the National Essential Drugs List (the “List”) will be purchased by various levels of government first, then distributed to medical facilities. All drugs on the List will be covered by the basic insurance plan supported by the government. The plan also calls for medical facilities to be upgraded, which includes the construction of 30,000 new hospitals, clinics and care centers across China.

Dr. Lequn Lee Huang, Sinobiopharma President and CEO was also quick to point out that, “We expect that this new advantage in the marketplace will also enable the Company to enhance our ability to improve return on investment for shareholders in 2010.”

The news comes at an opportune time, as the company managed to post its first overall net profitable quarter since the Q2 2008. (’bout time!)

* Revenues increased to US $1,293,764 for the three months ended August 31, 2009, from US $931,203 in the corresponding period in 2008. This is an increase of 39%.
* Gross profit increased 57% to US $962,923, reflecting a 74% gross margin for the three months ended August 31, 2009.
* An overall net profit overall of US $237,167 for the three months ended August 31, 2009, marks the first time that Sinobiopharma has moved to net profitability in more than a year.


About Sinobiopharma, Inc.

Sinobiopharma, Inc. is a fully integrated and highly innovative specialty biopharmaceutical company engaged in the research and development, manufacture and marketing of biopharmaceutical products in China, the world’s fastest growing pharmaceutical market. Known as Dong Ying (Jiangsu) Pharmaceutical Co., Ltd. in China, the Company’s current therapeutic focus is on anesthesia-assisted agents and cardiovascular drugs

Economic Conditions Affecting Sinobiopharma

After three years of broad consultation, intense debate and repeated revision, the Chinese government announced in early April 2009 the long-awaited Guidelines on Deepening the Reform of Health Care System, a blueprint for health care over the next decade as well as an ambitious three-year CNY 850 billion (equivalent to 124 billion US dollars) action plan to be implemented between 2009-2011, which is on top of the CNY 4 trillion stimulus package.

With the core principle of providing the primary health care as a public service, the blueprint aims to put in place by 2020 a basic health-care system that can provide “safe, effective, convenient, and affordable” health services to all urban and rural residents.

The three-year plan will strive to cover more than 90 per cent of the population under the primary medical insurance programmes (consisting of UEMI, URBMI and NRCMS), introduce the essential medicines system, improve primary health-care facilities, provide equitable access to the basic public health-care services, and conduct pilot reforms of public hospitals. Link to the story found here

According to recent reports, economic conditions are expected to continue to boost the growth of the pharmaceutical industry in China. The health of these drug developers and manufacturers has been improving continuously for the past nine years and it’s expected to get even better since the Chinese pharmaceuticals market is forecast to become the world’s firth largest by 2010 – and the largest by 2050.

Technical Chart Analysis
SNBP - SINOBIOPHARMA INC (OTCBB)

After downward momentum having plagued this company for much of the past year, it seems to have consolidated around the 0.20, finding a nice support level. Throughout August, September and October the stock struggled to maintain any upward momentum it may have gained due to low volume. As we can see, this all changed on 11/16/09, when record volume of 2,911,677 came running in to shoot the stock to a 38.89% close above the opening price. The MACD and EMA have once again engaged in a golden cross formation, something which has been familiar throughout the coming months. However, this time seems different as there appears to be an explosion of volume to help support this bullish signal. 11/17/09 will play a key role, should the company finish above the 0.34 resistance, 0.43 could be the next stop in price per share. The Relative Strength Index (RSI) appears at first glance to represent an overbought stock, however, in light of the downward momentum over the past year, a major correction is due. There has been heavy short interest within the last 3 months growing well over 3,200%+, as indicated by PinkSheets.com. Expect an additional boost in share price as shorts rush to cover due to the 0.3 days left to cover, as per data provided by ShortSqueeze.com.
Disclosure: Long SNBP
———–

By reading MiV Investments Inc. company profiles you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

MiV Investments Inc. is not paid, compensated or in any way incentivized to report news and developments about publicly traded companies, unless otherwise stated.
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