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: Immutep Limited (NASDAQ: IMMP)
Today’s penny stock pick is the biotechnology company, Immutep Limited (NASDAQ: IMMP).
Immutep Limited engages in the research and development of pharmaceutical products. The company develops immunotherapeutic products for the treatment of cancer and autoimmune diseases. Its lead product candidate is eftilagimod alpha (efti or IMP321), a recombinant protein that is in Phase IIb clinical trial as a chemo-immunotherapy combination for metastatic breast cancer.
The company also develops TACTI-002, which is in a Phase II clinical trial for the treatment of head and neck squamous cell carcinoma (HNSCC) and non-small cell lung cancer; TACTI-003 that is in Phase IIb clinical trial to treat HNSCC; and INSIGHT-003, which is in a Phase I clinical trial for the treatment of solid tumors, as well as INSIGHT-005 that is in Phase I/IIa clinical trial to treat solid tumors.
In addition, it offers IMP761, an agonist of lymphocyte activation gene 3 for autoimmune disease; IMP701, an antagonist antibody that acts to stimulate T cell proliferation in cancer patients; and IMP731, a depleting antibody that removes T cells involved in autoimmunity. Immutep Limited has collaboration agreements with GlaxoSmithKline, Novartis, CYTLIMIC Inc., Merck & Co., Inc., Institute of Clinical Cancer Research, Merck KGaA, and EOC Pharma.
Website: https://www.immutep.com
Latest 10-k report: https://cdn.kscope.io/7e82c2f9b8cb3b305f66cb0ae9afd078.pdf
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for IMMP in the last 3 months, the stock has an average price target of $8.00, which is nearly 205% upside from current levels.
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The company entered into Second Clinical Trial Collaboration Agreement with Merck KGaA, Germany, and Pfizer for a New Combination Study of its First-in-Class LAG-3 Candidate, Eftilagimod Alpha, and Avelumab to Treat Urothelial Cancer.
- Immutep’s Efti in Combination with Pembrolizumab Achieved Excellent Initial Overall Survival Benefit in 1st Line Non-Small Cell Lung Cancer
- IMMP Received Positive Feedback from FDA on Late-Stage Clinical Development of Eftilagimod Alpha in Non-Small Cell Lung Cancer.
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 with a high volume. Once the stock breaks out of the falling wedge pattern, it could move higher.
IMMP – 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 MAs: The stock is currently above its 50-day as well as 200-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 a pink color dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 50-week SMA, indicating that the bulls are gaining control.
IMMP – 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 IMMP is above the price of $3.00.
Target Prices: Our first target is $4.40. If it closes above that level, the second target price is $5.50.
Stop Loss: To limit risk, place a stop loss at $2.20. Note that the stop loss is on a closing basis.
Our target potential upside is 47% to 83%.
For a risk of $0.80, our first target reward is $1.40, and the second target reward is $2.50. 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 fiscal years ended June 30, 2022, and 2021, the company had net losses of A$32.2 million and A$29.9 million, respectively.
IMMP – Consolidated Statements of Comprehensive Loss
- IMMP currently has no products approved for commercial sale and to date has not generated material revenue from product sales. IMMP also has no manufacturing capabilities and is dependent on third parties for cost effective manufacture and manufacturing process development of its product candidates.
- The company was formerly known as Prima BioMed Ltd and changed its name to Immutep Limited in November 2017.
- Despite being a loss-making company, the executives are being paid significant compensation.
IMMP – Executive Compensation
- Hedge Funds Decreased Holdings by 115.0K Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
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.
Legendary Stockpicker: "Buy this A.I. stock NOW" [sponsor]His award-winning system pinpointed NVDA and META before both stocks doubled. Now it's flashing "BUY" on this under-the-radar A.I. stock. MORE HERE...