SLRX is moving high, but why?

15 giu 2020

(NOTE: Use daily chart then move to weekly to see my thesis)

SLRX

There is a strong sense of optimism for SLRX because of the PDUFA for Seclidemstat in P 1/2 Ewing Sarcoma trial this June 17, 2020. Most small bios like SLRX are typically driven by these types of updates, but it comes with a high risks that it may turn out it is not a good results. So, trade with caution.
Fundamentally SLRX has:

• 9.65M as of March 31, 2020 and 9.1M available from CPRIT.
  
• 10.53M float.
  
• Probably would not dilute because they already did in Feb. 12, 2020.
  
• Meets and exceeds the listing requirements as of last Feb. 13, 2020.
  
• By looking at the list of institutional purchases in Fintel. I could see a lot of buys from different funds since Feb.
  

I did use technical indicators initially, but I've decided to use the fundamentals to trade. I took a very small position ($1500) to test if my theory and I can see two levels of upside (list below) if the PDUFA turns out to be great but an abysmal potential loss of 50%+. Fortunately, losing $700 is not even close to .05% of my tiny portfolio.

• at 1.98 to fill the gap
  
• at 3.02 because this was one of the strongest support if you look at the "weekly" charts.
  
  To keep my sanity and be realistic on two of my exit points. I can see that $3.02 is likely (maybe 30% chance) because the candle on the weekly shows that the current uptrend is going to continue. Furthermore, I pondered why SLRX is very confident to post an 8K for the PDUFA date. I can only assume that they already have a good data and typically this happens if bios needs to issue more shares. However, that is the former is unlikely the cases since they already issued last Feb.
  
  GLTA!
  
  

16 giu 2020

Nota

I forgot to mention that an increase of institutional buys and an 8K is NEVER guaranteed an upside. I have seen this before with CURIS pharma when the CEO was over optimistic of their pipelines last year and turned out to be mediocre.

So, please treat these stocks with caution using a magnifying glass when entering a trade and a VERY VERY disciplined WIN or LOSE exit strategy.

17 giu 2020

Nota

Gap has been filled today. If the results of the PDUFA at around 10:10-10:20am are good tomorrow, then we COULD potentially see a run up to $3.00. Anything more than that is I believe is a bonus. Often the run up goes above the resistance level at around lunch time if the stock has descent volume coming in.