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: iBio, Inc. (NYSE: IBIO)
Today’s penny stock pick is the developer of precision antibodies, iBio, Inc. (NYSE: IBIO).
iBio, Inc. engages in the development of precision antibodies in the United States. It offers IBIO-100, a preclinical anti-fibrotic program for the treatment of systemic scleroderma and idiopathic pulmonary fibrosis; and EngageTx platform, which provides an optimized CD3 T-cell engager antibody panel.
The company is also developing vaccine candidates, including IBIO-101, an antibody to reduce tumor growth; Endostatin E4 peptide for use in chemotherapy and immunotherapy; Trop-2 for the treatment Trop-2 positive cancers; MUC16, a tumor-associated epitope; anti-EGFRvIII antibody to treat glioblastoma and other cancers; CCR8 protein candidate for treatment of various cancers; PD-1 agonist for the treatment of rheumatoid arthritis and other inflammatory diseases; and IBIO-400 for the treatment of classical swine fever.
iBio, Inc. has agreement with The Texas A&M University System for designing and manufacturing of plant-made biopharmaceuticals; and a research collaboration with the National Institute of Allergy and Infectious Diseases to investigate the potential of the company’s AI-driven epitope steering platform for the development of a vaccine for Lassa fever.
Website: https://www.ibioinc.com
Latest 10-k report: https://ir.ibioinc.com/sec-filings/content/0001420720-23-000045/0001420720-23-000045.pdf
Analyst Consensus: Not Covered By Wall Street Analysts.
Potential Catalysts / Reasons for the Hype:
- The company announced a collaboration with AstralBio Inc. and reported that its AI drug discovery platform would be used to develop obesity treatments.
- IBIO recently entered into a securities purchase agreement for a private investment in public equity financing that is expected to result in gross proceeds to the Company of approximately $15.0 million.
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 with a high volume. Once the stock breaks out of the falling wedge pattern, it could move higher.
IBIO – 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 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.
#5 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.
IBIO – Weekly Chart
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#7 MACD above Signal Line: In the weekly chart as well, 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 IBIO is above the price of $3.60.
Target Prices: Our first target is $5.20. If it closes above that level, the second target price is $6.70.
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 44% to 86%.
For a risk of $1.00, our first target reward is $1.60, and the second target reward is $3.10. 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. As of June 30, 2023, IBIO had an accumulated deficit of $288.9 million.
IBIO – Consolidated Statements of Operations
- IBIO has a limited operating history developing precision antibodies, has no products approved for commercial sale, has no significant source of revenue, and may never generate significant revenue.
- Despite being a loss-making company, the executives are being paid significant compensation.
IBIO – Executive Compensation
- The company requires additional funding to fully execute its business plan. The funding may not be available on commercially acceptable terms or at all. If IBIO is unable to raise capital when needed, it may be forced to delay, reduce or eliminate the commercialization of its development and manufacturing services and efforts for product development programs.
- Raising additional capital may cause dilution to existing stockholders, restrict the company’s operations or require it to relinquish rights to its technologies or product candidates.
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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