Algae Dynamics (ADYNF) - The Story Is Getting Better and Better

This morning, Algae Dynamics (ADYNF) announced it had signed a memorandum of understanding with Avanti Rx Analytics that calls for Avanti to test, extract, purify and export cannabis oil as part of the groundwork for developing marketable cannabis products.

A quick refresher is in order.

We first introduced Algae Dynamics to you back on January 17th, pointing out how although its history was as an algae and algae-oil provider (for health products), it was getting into the cannabis business as well.

It wasn't terribly clear exactly what that meant at the time, though it was exciting all the same. Since then, we've learned exactly what Algae Dynamics had in mind. As it turns out, the medical benefits of cannabis can be enhanced by the simultaneous use of algae oil, and if I'm understanding the science right, vice versa. The development of combo products is the ultimate goal here, and there are several directions the company could go with it.

It needs partners to do the R&D work to develop an algae/cannabis product, of course, and it's found two good ones in the meantime. On February 24th it announced a deal with the University of Waterloo to research the potential of algae/cannabis drugs to combat cancer, and just earlier this week it announced it was going to be working with the University of Western Ontario to develop algae/cannabis drugs to treat a variety of mental illnesses. In both cases the company will end up with full ownership -- and no royalty-payment requirements -- of any intellectual property created as part of the studies.

The two schools need material to work with and test though, which is why this morning's news isn't terribly surprising. That is, it's tapping the aforementioned Avanti Rx Analytics to take care of that task.

It's a bigger deal than it may seem on the surface.

As you might imagine, even the regulatory red tape for medical cannabis is rather tricky to navigate, and those licenses aren't just handed out to anyone. Avanti isn't just anyone though. The company is a Health Canada-approved GMP (good manufacturing practices) and OCDS (open contracting data standard) contract drug developer, which means the government has already done its due diligence on the company and says it can be entrusted with often-debated cannabis.

If you need an outfit to help with the legal and legitimate development of a cannabis-based drug, Avanti Rx Analytics is it. It's encouraging to see just how quickly Algae Dynamics is progressing with its R&D... a lot faster than we were expecting.

With all of that being said, the most interesting thing about Algae Dynamics isn't the news, but the chart.

Take a look. While ADYNF took an uncharacteristically big dive early this morning, it's more than rebounded in the meantime. That chart pattern, which looks like a hammer, is indicative of a transition from a net-selling environment to a net-buying one. The volume spike underscores the notion that the tide has turned, with most of the unconvinced owners being washed out today, clearing the decks for a rebound

The clincher for a hammer-shaped reversal bar is a move above the hammer day's high on the following day. Given everything we know about the company and everything we've seen on the chart though, we're inclined to interpret this bullish clue at face value.

Source:http://www.smallcapnetwork.com/