I took a small position on May 20 for $1.02 and it was a big mistake because I did not do my usual technical analysis and basic fundamental checks. I was lucky that I got out with a profit on the last run up on July 13. I placed a $1.20 GTC order because I am located in New Zealand and it will be impossible for me to be on top of my trades.
However, the stock has plenty of cash ($26M from March 2020) with a cash burn rate of around $15M per year. Thus, dilution is not in sight until the next year or longer. The company has PTX35 which received an IND on June 18 and have been promoting this drug since March. So, in my view, the company will be driven by COVID19 type news. I said this because I've been noting that stocks that has COVID19 in their pipeline typically propels without a company news like $SRNE and etc.
My investment thesis:
Entry point is best when it pulls back on the first support line. I used this support line because the stock bounced around this area on the weeks of Dec 03 and Jan 02 (switch to weekly charts). MACD signal is about to cross the signal line in a downward trend which typically an indication of a pullback (most of the time). I would also suggest to wait for the MACD line about to crossover above the signal. Most importantly, for the accumulation phase is starting to appear similar to the last accumulation line I've drawn. Although, StochRSI indicates yesterday that it is overbought which underpins that it needs to do a healthy pullback. However, this is not quite reliable all the time as you can see from the accumulation lines I've drawn except when you start looking in the 4H period. Fortunately, we can breath that the stock will still continue to rise because the ADX DI its ADX line is still above 20 and the positive is still also above 20. Therefore, traders are watching for a COVID19 and TA play.
It is in my opinion that the best entry point is when the aforementioned signals are met and patience is the key. Then use the StochRSI for oversold indication in the 4H charts because the 1D charts are too slow. Like so below:
Disclosure:
I no longer have a position and have sold at $1.20 but I am waiting for a new entry point.
As always, keep your indicators simple, stick to your plan, and be patient. :)
However, the stock has plenty of cash ($26M from March 2020) with a cash burn rate of around $15M per year. Thus, dilution is not in sight until the next year or longer. The company has PTX35 which received an IND on June 18 and have been promoting this drug since March. So, in my view, the company will be driven by COVID19 type news. I said this because I've been noting that stocks that has COVID19 in their pipeline typically propels without a company news like $SRNE and etc.
My investment thesis:
Entry point is best when it pulls back on the first support line. I used this support line because the stock bounced around this area on the weeks of Dec 03 and Jan 02 (switch to weekly charts). MACD signal is about to cross the signal line in a downward trend which typically an indication of a pullback (most of the time). I would also suggest to wait for the MACD line about to crossover above the signal. Most importantly, for the accumulation phase is starting to appear similar to the last accumulation line I've drawn. Although, StochRSI indicates yesterday that it is overbought which underpins that it needs to do a healthy pullback. However, this is not quite reliable all the time as you can see from the accumulation lines I've drawn except when you start looking in the 4H period. Fortunately, we can breath that the stock will still continue to rise because the ADX DI its ADX line is still above 20 and the positive is still also above 20. Therefore, traders are watching for a COVID19 and TA play.
It is in my opinion that the best entry point is when the aforementioned signals are met and patience is the key. Then use the StochRSI for oversold indication in the 4H charts because the 1D charts are too slow. Like so below:
Disclosure:
I no longer have a position and have sold at $1.20 but I am waiting for a new entry point.
As always, keep your indicators simple, stick to your plan, and be patient. :)
Trade closed: target reached:
Sold at $1.20