Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Gets Precariously High

In yesterday’s session Elite Pharmaceuticals Inc (OTCMKTS:ELTP) kept riding the upwards draft that pushed the stock up nearly 50% within the short space of just a few weeks. By the closing bell, ELTP had put on another 23% and stopped at $0.387 per share. Volume picked up significantly as well, at over 8 million shares – the largest daily volume figure for the past six months.

The company has not put up any press releases since October 21, when it announced positive results from a pivotal phase 3 study of one of its products – the abuse-deterrent opioid ELI-200. The release informed that patients reported no adverse events during the course of the study.

ELTP did rather well for itself in its last reported quarter. The latest 10-Q for the three months ended June went public on Aug 10 and contained the following:

• $11 million in cash
• $3.3 million in current liabilities
• $7.0 million in quarterly revenues
• $2.5 million in quarterly income from operations
• $16.0 million in quarterly net income

Those results are quite impressive, especially considering the performance of the better part of other OTC biopharma stocks. ELTP actually set a new revenue record in this quarter, and president Hakim remarked he was “extremely pleased” with the quarterly performance. This good news seems to be the primary driver behind ELTP‘s explosive chart surge that took it to fresh 52-week highs.

One thing to keep in mind is that in the process of climbing to its new chart position, ELTP also became heavily overbought. As a matter of fact, it has been overbought for a number of days in a row. Even though this did not stop the stock from putting on almost a quarter yesterday, a reversal and profit taking from the new 52-week highs is not impossible, so caution is advised if you are not already in.