We recently started a series called “Penny Stock of the Day”. These ideas are geared for traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: PetVivo Holdings Inc. (NASDAQ: PETV)
Today’s penny stock pick is the veterinary biotech and biomedical device company, PetVivo Holdings Inc. (NASDAQ: PETV).
PetVivo Holdings Inc. engages in the licensing and commercializing of medical devices and biomaterials for the treatment of afflictions and diseases in animals.
Its lead product is Kush, a veterinarian-administered joint injection for the treatment of osteoarthritis and lameness in dogs and horses. The company’s pipeline products include 17 therapeutic devices for veterinary and human clinical applications.
Website: https://petvivo.com
Latest 10-k report: https://sec.report/Document/0001493152-21-015435/
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for PETV in the last 3 months, the stock has an average price target of $7.00, which is nearly 79% upside from current levels.
Source: TipRanks.com
Recent Analyst Ratings | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The news that PETV intends to introduce its lead product, SPRYNG™ with OsteoCushion™ Technology, at the American Association Equine Practitioners (AAEP) conference, the largest veterinary equine conference.
- Corporate Insiders buying Shares Worth $58.8K in the Last 3 Months.
Insiders | Source: TipRanks.com
- High number of pet adoptions during the past year due to covid 19 lockdowns.
- Uplisting to the NASDAQ.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Downtrend Channel Breakout: The daily chart shows that the stock has broken out of a downtrend channel, which is shown as orange color lines. This is a possible bullish indication.
PETV – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.
#3 Price above MA: The stock is currently above its 50-day SMA, indicating that the bulls have currently gained control.
#4 Bullish RSI: The RSI is above 50 and moving higher, indicating possible bullishness.
#5 Bullish Stoch: The %K line of the stochastic is above the %D line, and has also moved higher from oversold levels, indicating possible bullishness.
#6 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a purple color dotted line. This is a possible bullish indication.
PETV – Weekly Chart
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#8 MACD above Signal Line: In the weekly chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for PETV is above the price of $4.20.
Target Prices: Our first target is $6.00. If it closes above that level, the second target price is $8.00.
Stop Loss: To limit risk, place a stop loss at $3.10. Note that the stop loss is on a closing basis.
Our target potential upside is 43% to 90%.
For a risk of $1.10, our first target reward is $1.80, and the second target reward is $3.80. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses. For the year ended March 31, 2021, PETV lost approximately $3.5 million without obtaining any commercial revenues and had an accumulated deficit of approximately $58.1 million.
PETV – Net Loss
- There are rumors that PetVivo Holdings, Inc. has filed for bankruptcy protection and seeks asset sale.
- Despite being a loss-making company, the executives are being paid significant compensation.
PETV – Executive Compensation
- The company had made only around $5000 in the latest quarter.
PETV – Q3 Report
- The company lists only two employees and has no revenue or earnings guidance.
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!
Happy Trading!
Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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