PYC (ASX) PYC Chart looks the goods

Originally posted by Medicine Man: ↑

What a great week! 2nd projected target of 16.5 - 17c achieved 8 days early. The SP is going from strength to strength.

That's the good news. But from a TA standpoint, reaching an expected short term peak would (nearly) always need a breather. Virtually all the robots are trained by traders reading the same book! Therefore some profit taking would occur and consolidation is the expected course in the absence of further impetus.

The Bear Case:
Fibonacci retracement levels are as follows: 78.6% @ 16c to let some pros to take quick profits. Support would come from those investors who have confidence in the FDA giving approval on orphan drug designation (ODD) and rare paediatric disease designation (RPDD). Some traders could take their chances to push the SP down to 61.8% @ 15c so they could buy more. If it ever gets to 50.0% @ 14.5c, there would be strong buying interest from instos and funds to ensure PYC could get into the ASX300 Index. However we still need to be mindful of the overall market sentiment.

The Bull Case:
If FDA approves one or both designations, SP would certainly has reason to go up. The next Fibonacci level is 123% @ 18.5c then 150% @ 20c. PYC's US office would be fully established by now. The FDA news or PYC's breakthrough technologies might catch some US investors/funds interest, then buying volume could have a quantum leap by an order of magnitude.

Since the SP took off on 12.06.2020 when S&P made the All Ords announcement, I have been watching the volume analysis closely. Look at the buy/sell volume bars on the right of the chart, blue represents buy volume and orange the sell volume; the buy/sell volume ratio is nearly 3:1. This is an indication of investors' confidence and their continual accumulation of the stock.

These are my TA thoughts, DYOR! If you would like more of these charts and analysis, please click the "Great analysis" button for encouragement.

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Last week, the SP has consolidated as expected. However retracement to 15c was not as harsh 14.5c at the 50% Fibonacci level. This week the 1 year performance of 264.94% is higher than last week's figure.

In the next 4 days, we would be waiting with a bated breath for FDA's decision on both orphan drug designation (ODD) and rare paediatric disease designation (RPDD). Though it should due by end of Sep-2020 we need to include 01.10.2020 as US time is 1 day behind. Any one designation and preferably both being approved would bump the SP up to 17.5 - 18c (13-16% up).

Since the last peak of 17c on 17.09.2020, a new steeper uptrend channel (brown colour) has developed and confirmed.

The Bull Case:
Good news from FDA would certainly move the SP at least back to the old high of 17c. If both designations got approved, it should reach 18c which is the 123.6% Fibonacci level. 20c is now well within reach on or around 13.11.2020 if the Rabbit Eye efficacy test is successful or US investors started buying. All these projections are based on the overall market sentiment remaining steady.

The Bear Case:
If FDA decisions are delayed by a few days due to COVID-19, the SP might cool to 14.5c at 50% retracement. If both designations were not approved, it would go all the way down to 13c which is the bottom of the uptrend channel and 23.6% Fibonacci level. Between 12.5c to 11.5c, there is a very strong support band (yellow shaded area). Besides, 11.5c is the base of the current swing high, so it is the most logical price level to retrace to when the hope of FDA designation approval is dashed.

With COVID-19 holding up a lot of bureaucratic processes, there is all likelihood that the decision might not come by end of this month.

On a positive note, based on PYC's track record of excellent efficacy and minimal toxicity in the "Retina in a dish" test, the Rabbit Eye clinical test should yield similar positive result.

These are my TA thoughts, DYOR! If you would like more of these charts and analysis, please click the "Great analysis" button for encouragement.