ELTP

ELTP Stock Slides After Share Conversion

ELTP Elite Pharmaceuticals, Inc. (OTC:ELTP) is one of the most active penny stocks among traders. Over the past few trading sessions, we have been experiencing very unusual trading volume in the stock.

The stock closed 10.60% to $0.152 following the news that the company has agreed to convert Convertible Preferred Stock into the Company’s common stock. The conversion dilute existing shareholders earnings and would lead to save $720,000 in annual dividends. Following the conversion, the company would have total outstanding stock of approximately 243.36 million shares.

ELTP gapped down sharply on Tuesday, opened at $0.16, and touched an intraday low of $0.12 within 20 minutes. Later on, the stock bounced back and made an intraday high of $0.17. Finally it ended the day at $0.152.

If we look ELTP’s at the recent stock performance, the stock had soared over 46% on May 20, 2011 on volume never seen since Apr 15, 2011. The stock had seen various volatile sessions in the month of April and during the same month the stock jumped about 125%.

So far in the month of May, the stock has been consolidating and at current price, it is trading above its 50-Day Moving Average and 200-Day Moving Average of $0.15 and $0.08 respectively.

Going forward, it would be difficult to predict, but the stock is showing support at $0.15 and $0.12, which could be strict stop loss for traders and any sharp move up/down from here on, could trigger the up/down trend.

So, watch out for ELTP stock.

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