Legend International Holdings, Inc. (OTC:LGDI) price behavior depicts contradicting activity and could lead to a major breakdown considering the increasing selling pressure.LGDI added significant value to the stock price over the last couple of months, but the rally has reached a point where additional stimulus is required. Profit taking is occurring as the shares now trade in a price channel and cannot break the resistance at $0.90.[BANNER]
Market cap is over $226 million – still inflated on the last update on the Paradise Phosphate Project. On November 9, the company also filed its quarterly update which showed further depreciation in the cash position. With around $40 million in liquid assets, the business has funds to last roughly a year due to the high cash burn rate. Over a one-year period the company has historically spent around $35 million.
Legend International revealed no further progress with the funding issues related to the Paradise Project. Until some press release comes into play, the share price is very likely to fluctuate in the historical channel of between 68 and 90 cents.
The price is sustained by a very healthy balance sheet, but without progress in the ventures and with a significant cash burn rate, this value can easily diminish over a longer period with no updates coming out.
