Catalyst investing with T2 Biosystems (TTOO)
Shares of T2 Biosystems (TTOO) have fallen by roughly 75% since the company's IPO was priced at $11 in 2014. Over the past 3 years, the share price has lost roughly two-thirds of its value and so far 2019 has seen further decline.
Technical argument
Limited: it’s no easy task trying to evaluate identify trading opportunities in price trends and patterns seen in small market capitalisation biotechnology. TTOO stock price is volatile because it is in possession of a breakthrough technology with its success relying on pivotal data that has not yet been made public. In addition, concerns remain, including cash burn and near-term financing. Even if TTOO is successful in achieving approval for various products the company may have difficulty getting hospitals and labs to adopt the technology.
I have included indictors such as MACD, momentum, Moving Average MA, Relative Strength Index RSI and Point of Control POC. The conclusions from these indicators are limited, I have explained each individually on the graph.
What I do draw from the graph is that TTOO has fallen back into the Point of Control: price point with the highest trade volume. We can see a bullish RSI divergence: TTOO makes a lower low and RSI forms a higher low and volume has started to increase. If investors consider the stock to be oversold the volume with continue to increase as traders buy stock and we will see a price rise.
I would NOT buy stock based on this analysis because the volume spike could be investors offloading stock, even if we are at an all-time low.
So let’s ignore the technical analysis because in this situation making an investment decision based solely on evaluating price trends won’t have any bearing on the outcome of upcoming catalysts and therefore the stocks potential value.
Upcoming catalysts
The company is in possession of a breakthrough technology for the detection of sepsis.
A possible near-term catalyst for upside is results of the T2Bacteria Panel pivotal FDA clinical trial to be published in a peer-reviewed medical journal in Q2 2019
T2Lyme Panel is currently in a pivotal Phase 3 trial with very encouraging results so far and a $700 million market being targeted.
Technical argument
Limited: it’s no easy task trying to evaluate identify trading opportunities in price trends and patterns seen in small market capitalisation biotechnology. TTOO stock price is volatile because it is in possession of a breakthrough technology with its success relying on pivotal data that has not yet been made public. In addition, concerns remain, including cash burn and near-term financing. Even if TTOO is successful in achieving approval for various products the company may have difficulty getting hospitals and labs to adopt the technology.
I have included indictors such as MACD, momentum, Moving Average MA, Relative Strength Index RSI and Point of Control POC. The conclusions from these indicators are limited, I have explained each individually on the graph.
What I do draw from the graph is that TTOO has fallen back into the Point of Control: price point with the highest trade volume. We can see a bullish RSI divergence: TTOO makes a lower low and RSI forms a higher low and volume has started to increase. If investors consider the stock to be oversold the volume with continue to increase as traders buy stock and we will see a price rise.
I would NOT buy stock based on this analysis because the volume spike could be investors offloading stock, even if we are at an all-time low.
So let’s ignore the technical analysis because in this situation making an investment decision based solely on evaluating price trends won’t have any bearing on the outcome of upcoming catalysts and therefore the stocks potential value.
Upcoming catalysts
The company is in possession of a breakthrough technology for the detection of sepsis.
A possible near-term catalyst for upside is results of the T2Bacteria Panel pivotal FDA clinical trial to be published in a peer-reviewed medical journal in Q2 2019
T2Lyme Panel is currently in a pivotal Phase 3 trial with very encouraging results so far and a $700 million market being targeted.
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