A friend of mine asked me today “What is your prediction on the Brooklyn ImmunoTherapeutics’ stock price, which has the ticker symbol BTX (name or symbol used when buying the company’s shares)?
Before I responded his question, I also asked the friend “What is your goal? Meaning, do you want to make a long-term investment? Or do you want to just swing trade BTX (holding share of a company for a period of time that lasts between two days to weeks)? The friend replied by stating that he wants to hold the shares of BTX as an investment. Once his goal was revealed, it allows me to focus my response about BTX on two important concepts (Fundamental and Technical analyses) that every trader and investor must learn about when planning on trading or investing in similar company.
Please read my response to his question now below. However, as you are reading my response, please keep in mind that I am not a financial advisor. I share my thoughts about the stock market based on how I analyze certain information that is available online about companies. It is really your responsibility to do your due diligence if you want to buy the share of any company that I mention in my analyses. Now feel free to read my answer to the above question.
Let’s fundamentally say, there is no reason to hold the Brooklyn ImmunoTherapeutics’ stock (BTX) for a long-term period right now because it is a new biotech company that has recently received the FDA approval. Although receiving the FDA approval to start developing gene therapies is a positive catalyst, the company still has $ 0.00 of revenue in terms of pipeline (the term pipeline refers to the phases biotech companies must pass through until a drug approval). Also, it is still in its preliminary stage; however, it has had some great momentum at the end of the month of April 2021 until the early month of May 2021. During that short period of time, the share price of the company surged from below $ 8.50 to over $80.00. While this was a profitable move for many traders and investors, there were very few catalysts to substantiate such a great move by the Brooklyn ImmunoTherapeutic in its infancy stage as a biotech company. Nonetheless, according to many experts, that home run (A large gain produced by an investment in a brief period of time) was due mostly to positive PR (Public relations) and the perception developed by many traders and investors of BTX as the next GameStop (GME).
Contrary to the fundamental analysis of Brooklyn ImmunoTherapeutics (refers to the financial statement of the company), if we follow the technical indicators (see the above picture), it looks like it is in a good buy zone right now because it is still in an uptrend. As we notice that the 20 days moving average line (orange on the picture) is over the 50 days moving average line (green line on the picture), which in turn is over the 200 days moving average line (pink line on the picture). In addition, it is in area of previous support at $ 14.28.
Technically, as previously stated,the price of Brooklyn ImmunoTherapeutics’ share seems to be in a good area to buy for another home run even though one must be very cautious by setting up a stop loss somewhere below $ 13.32, which was also a previous area of support . However, because the company is not yet fundamentally attractive, it is important to mention there is a high risk that the share price of BTX may decline more below the suggested price of the stop loss to bounce off the 200 days moving average (pink line on the chart)before making a reversal trend.