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Since the Coronavirus came into our lives this slice of the stock market has given ordinary people the chance to multiply their money by 96% in 21 days on JP Morgan.

Stocks  | April 28, 2020

Inovio Pharmaceuticals (INO) spiked higher last week on the news that the biotech company received $6.9 million to finance its Phase 1/2 clinical trial in South Korea.

The stock opened Monday at $15.78 and traded as high as $16.50 then faded below its weekly pivot at $15.77.

Inovio’s gain the funds from the Coalition for Epidemic Preparedness Innovations, a foundation that grants money for the development of vaccines for infectious diseases.

In my career I have analyzed many speculative biotech companies. These stocks will trade between a buck a share and five bucks a share then spike higher on a milestone met. 

If the milestone is not sustained back down, they go.

If a stock is trading between $1 and $3 a share, you can buy it as an option on survival. You invest only the money you can afford to lose if the company goes bust.

Inovio was an option on survival as 2020 began. At Monday's open, the stock is up 361% year to date and up 435% since trading as low as $2.95 back on Jan. 3. 

The stock traded as high as $19.36 on March 9 and is 18.5% below this high.

You do not buy a speculative biotech stock based upon its p/e multiple or dividend yield.

You buy it because you anticipate a milestone. In the case of Inovio, it provides a trail vaccine for the treatment of Covid-19.

If they succeed, the sky’s the limit.

My proprietary analytics shows a base within which to buy on weakness between semiannual, quarterly and monthly value levels at $3.42, $4.26 and $5.21, respectively.

The Daily Chart for Inovio

The daily chart for Inovio shows a sideways to up pattern since the beginning of the year.

Establishing a speculative long position was justified by the formation of a golden cross on January 21. This buy signal occurs when the 50-day simple moving average rises above the 200-day simple moving average to indicate that higher prices will follow.

After this buy signal the stock could have been bought at is semiannual value level at $3.42. This tracked the spike higher to $19.78 set on March 9.

The milestone expected was not met and the stock plunged back to $5.13 on March 16.

The stock crossed its annual pivot at $9.66 between March 5 and March 12, then the stock returned to this magnet on April 20.

This led to the current spike higher to $16.50 this morning. If you were long this stock your position could have been reduced at its weekly pivot at $15.75.

The Weekly Chart for Inovio

The weekly chart for Inovio is positive with the stock above its five-week modified moving average at $10.04. 

The stock has been above its 200-week simple moving average or “reversion to the mean” at $5.37 since the week of March 5 as the bad news on COVID-19 began. 

It was tested again as a buying opportunity during the week of March 20 after the first milestone failed at $19.36 on March 9.

The 12x3x3 weekly slow stochastic reading is projected to rise to 44.48 this week up from 37.54 on April 24.

Trading Strategy: Buy Inovio on weakness to its annual pivot at $9.66. Add to positions on weakness to monthly, quarterly and semiannual value levels at $5.21, $4.26 and $3.43, respectively.

A revolutionary initiative is helping average Americans find quick and lasting stock market success.

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