Summary
- Looks to be just transitioning from Stage 1 to Stage 2.
- It’s already up 40%+ out of the transition.
- Fundamentals are weak, but there is incoming strength for some other reason.
- Watch for retest of transition area or, more likely, a Base 1 to develop.
Stage Analysis
Transition Structure
| Price above 30 and 40-week MA | YES |
| 30-week MA is above the 40-week MA | YES |
| 40-week MA is turning up | YES |
| Series of higher highs and higher lows | YES |
| Large volume spikes and low volume pullbacks | YES |
| More up weeks on volume than down weeks | YES |
Technicals
This looks like a good early Stage 2. I had been watching this for a while but took my eye off it and looks like I may have missed a good BO of the transition. Regardless, it’s made a strong 40%+ move since, so it’s too late to chase now.
I doubt it will retest the transition. In fact, if it did that’d probably be a bad thing. Nevertheless, I will watch for it, but the more likely scenario will be the formation of a Base 1. Either way, it will probably take a bit for it to happen. I’ll keep a better eye on it this time in my primary watchlist.
Fundamentals
The fundamentals are really not good. There isn’t much financial data, but they don’t appear to be profitable. Regardless, in mid 12/22 they announced some positive trial data and raised cash. The good thing is they should have a good pile of cash now.
| Past 2 quarters EPS growth >= 25% | No, only last Q |
| Past 2 quarters margin growth >=25% | N/A, no margin data |
| EPS growth >= 25% in past 3 – 5 years | N/A, data doesn’t go back that far |
| EPS surprises | YES, 5% this Q and 17% the Q before that |
| EPS break out | YES, Last Q was 27.12% |
| ROE >= 17% | NO |
| Earnings drift | YES |
