Traders, as I speak, this is possibly one of THE cheapest optionable stocks you can find that is worthy of investment...
Why?
TXMD seems to be a small cap that is extremely cheap and MOST IMPORTANTLY you can buy options on this stock. Currently TXMD sits in a position where it's hard to find a stock at: in a Wyckoff Goldilocks zone of investment...
If you study the Wyckoff method, THE place to enter a stock long during an accumulation phase is what is referred to as the "SOS" or Sign of Strength. An SOS is always reinforced by large volume. So large in fact, that it is much bigger than the rest of the trading range. This is how we know that institutional investment has entered and we are ready to move into a markup stage.
While further small retracement is a possibility as a likely continuation pattern plays out in the coming weeks, the fact is that the markup stage WILL follow and it will take this stock up and out of this trading range entirely. THIS is the perfect time to invest.
As of tonight, Jun 18th call options in the $3 strike range are at 0.78, which is a decent value. But we also have Sept 17th call options at 3.5 and $4 strikes at 0.88 and 0.75 respectively, which gives us a better Theta for time decay and allows the likely continuation pattern to play out.
Keep in mind that the continuation pattern could just end up being a quick and swift localized retrace instead of a full on pattern playing out. Sometimes when a stock moves, it moves fast and doesn't slow down for patterns to even develop.
This is an amazing setup no matter which way you look at it. Call options are the way to go with this, but a pure stock buy and hold is also a great strategy.
they just filed to sell 15% common stock from the offering ... this going down at least till next week.
Zulu_Kilo
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@AlAlawiAlawi, you could easily be right about that. But what I will say is that companies are rarely stock gurus. Meaning, yes... They know the regulatory components, but they rarely understand their own stock's price or why it is even blowing up right now.
And plus, it's not unusual for any company to do this really at any time if they have legit projects they need immediate capital for. Wyckoff structuring and institutional investing rarely cares about these types of events, especially in this cycle of the Wyckoff structure.
But in sentiment with you, I agree that it could be doing a gap coverage play here, although I have seen so many of these gap coverages get down to where they should cover the gap, and never do... Long term investing rarely cares about these small plays. Long term we can agree that this is going up. Trying to catch a falling knife tends to go the opposite way for a trader.
AlAlawiAlawi
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@Zulu_Kilo, honestly I have no education on the Wyckoff Theory here, however, I would respect the rejection volume that came with crossing the 2$, and at least wait to 1.5$ to find support structure. I sold down in 1.4$ and made a mistake of not holding this now with hindsight. However, at 2$ today it's hard to say this stock is mispriced and must be valued at higher., honestly this company is yet to be profitable and its management has failed to reach multiple targets previously which pushes investors confidence to a risk-averse territory, bringing back the 1.5$ valuation to a more reasonable optimistic level.
Zulu_Kilo
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@AlAlawiAlawi, Great discussion my friend! See... This is what TV should be all about. And you're not wrong on what you're seeing either.
On a much bigger view, this is what I'm seeing, and on a fundamental basis, you're right that they've not been profitable... But they have also generally been close to their earnings estimates as well.
On another fundamental price structure look, we have seemed to have broken out of the descending channel from 2019, most importantly WITH HIGH VOLUME which is generally a strong confirmation that the rally is real and not a fake breakout.
AlAlawiAlawi
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@Zulu_Kilo, Not that I don't enjoy 16 year old trolls on TV haha, you are absolutely correct that its rare to find substance based arguments around here. I was exposed at 18% with TXMD on an average price of 1.29$ back in January, honestly I would only get back in below 1.5$ as I fear its a target stock to Short where the short squeeze has materialized now.