We recently started a series called “Penny Stock of the Day”. These ideas are geared towards 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: Ekso Bionics Holdings Inc. (NASDAQ: EKSO)
Today’s penny stock pick is the powered exoskeleton bionic devices company, Ekso Bionics Holdings Inc. (NASDAQ: EKSO).
Ekso Bionics Holdings Inc. designs, develops, sells, and rents exoskeleton products in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates in two segments, EksoHealth and EksoWorks. The EksoHealth segment designs, engineers, manufactures, and markets exoskeletons for applications in the medical markets.
The EksoWorks segment designs, engineers, manufactures, and markets exoskeleton devices to allow able-bodied users to perform difficult repetitive work for extended periods. It also provides EksoNR, a wearable bionic suit and rehabilitation device that assists physical therapists and physicians to treat patients with acquired brain injury, stroke, and spinal cord injury; and EksoUE is a wearable upper extremity assistive device that helps to reduce the effect of gravity on the wearer’s shoulders and arms. Ekso Bionics Holdings, Inc. has a license agreement with Lockheed Martin Corporation.
Website: www.eksobionics.com
Latest 10-k report: https://sec.report/Document/0001549084-22-000006/
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for EKSO in the last 3 months, the stock has an average price target of $11.00, which is nearly 405% upside from current levels.
Source: TipRanks.com
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- EKSO received 510(k) clearance from the U.S. Food and Drug Administration (FDA) to market its EksoNR robotic exoskeleton for use with Multiple Sclerosis (MS) patients.
- The company announced that it is nearing completion of ONWARD™ Phase 3 pivotal trial of AD04 for the treatment of Alcohol Use Disorder; and is on track to report Phase 3 results in the current quarter.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple color lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out from the falling wedge pattern. Once the stock breaks out of the falling wedge pattern, it could move higher.
EKSO – 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 Stoch: The %K line of the stochastic is above the %D line, and has also moved higher from oversold levels, indicating possible bullishness.
#5 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#6 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as an orange color dotted line. This is a possible bullish indication.
EKSO – 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 EKSO is above the price of $2.40.
Target Prices: Our first target is $3.50. If it closes above that level, the second target price is $4.40.
Stop Loss: To limit risk, place a stop loss at $1.75. Note that the stop loss is on a closing basis.
Our target potential upside is 46% to 83%.
For a risk of $0.65, our first target reward is $1.10, and the second target reward is $2.00. 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. EKSO’s net losses were $9.8 million and $15.8 million for the years ended December 31, 2021, and 2020, respectively.
EKSO – Consolidated Statements of Operations and Comprehensive Loss
- The company faces stiff competition within the medical devices and industrial robotics markets on the basis of product features, clinical outcomes, price, services, and other factors. Competitors may offer, more efficacious, safer, cheaper, or more convenient alternatives to EKSO’s products, including alternatives that could make the need for robotic exoskeletons obsolete.
- Corporate Insiders Sold Shares Worth $91.7K in the Last 3 Months.
Insiders | Source: TipRanks.com
- Despite being a loss-making company, the executives are being paid significant compensation.
EKSO – Executive Compensation
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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