Market jitters caused some to sell while long term investors continued to accumulate at this low entry price!
The trading range of 10 - 14c is a professional traders' haven as each 0.5c move represents a 3.5 - 5% profit. There would be a lot of repeated buy sell cycles, just to make a good 3-10% profit while the SP is bobbing up and down in a tight range for the last 2 months.
Looking at the Volume Profile (blue/gold horizontal bars on the right), 12c appears to be a sweet spot. Watching the trading depth would tell a similar story. Every time those 11.5c or 12c buyers were depleted, they would come back in the million the next day.
This sideways consolidation needs some news of quantifiable valuation jump in order to break to the upside.The latest news on 31.08.2020's Preliminary Final Report, PYC announced it has transformed into a drug development company with an RNA drug discovery engine and a proprietary drug delivery technology. It was really good news but not good enough, judging by the lack of price action in last 5 sessions.
The beauty of TA is while the chart appears to be going sideways and no clear trend, the MA, EMA, Stochastic, MAC, RSI etc. have started trending up, giving a
buy signal on the daily chart and a strong buy signal on the weekly chart (see 2nd diagram below).This month Sep-2020 is crunch time for PYC and some smart investors might back their trunk in. Quoting from Hottod's post, FDA is due to announce the outcome of applications for both orphan drug designation (ODD) and rare paediatric disease designation (RPDD) which were submitted on 31.07.2020 with a nominal turnaround time of 60 days. If approved, here are the rewards:
Orphan Disease Designation
The three main financial incentives attached to ODD are:- Tax credits up to 25% of qualified clinical trials costs
- Waiver of FDA User Fees (~US$3m)
- Eligibility to receive 7-years of marketing exclusivity
Rare Paediatric Disease DesignationThe main incentive attached to RPDD is that the drug sponsor becomes eligible to receive a Priority Review Voucher (PRV). The PRV is a transferable voucher that allows the bearer to receive priority review for any future product. Products with priority review can expect an FDA approval decision within 6 months of NDA submission, instead of the usual 10 months. The PRV is sellable and in the past some companies have sold them for amounts ranging from US$67 - $350 million.
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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