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: Tevogen Bio Holdings Inc. (NASDAQ: TVGN)
Today’s penny stock pick is the clinical-stage specialty immunotherapy company, Tevogen Bio Holdings Inc. (NASDAQ: TVGN).
Tevogen Bio Holdings Inc. develops off-the-shelf precision T cell therapies for the treatment of infectious diseases, cancers, and neurological disorders. The company develops TVGN 489, which has completed Phase 1 clinical trial for the treatment and prevention of chronic lingering symptoms of the disease (Long COVID), as well as COVID-19 in B cell immune suppressed acute COVID-19 patients without a B cell cancer indication, elderly and infirm acute COVID-19 patients, and acute COVID-19 in patients on T cell suppressing drugs, including solid organ transplant patients. It is also developing TVGN 601 for treating multiple sclerosis; TVGN 930 for the treatment of Epstein-Barr virus associated lymphomas; TVGN 920 for treating cervical cancer; and TVGN 960 for the treatment of mouth and throat cancer.
Website: https://tevogen.com
Latest 10-k report: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001860871/3b1ef753-6bb2-45a4-88f1-124cd99eb5a9.pdf
Analyst Consensus: Not Covered By Wall Street Analysts.
Potential Catalysts / Reasons for the Hype:
- The company announced that its AI division, Tevogen AI, has joined Microsoft for Startups. This partnership aims to accelerate drug development and reduce costs by leveraging Microsoft’s ecosystem and AI technology.
- Tevogen Bio has projected $1 billion in revenue for its oncology pipeline’s launch year and up to $14 billion over five years.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Breakout from Consolidation area: The daily chart shows that the stock had been consolidating within a price range for the past few weeks. This area is marked as a purple color rectangle. The stock has now broken out from this consolidation area with high volume and is currently trading above it. The breakout level of this consolidation area typically acts as a good support level.
TVGN – 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 Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates bullishness.
#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.
TVGN – 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, 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 TVGN is above the price of $2.60.
Target Prices: Our first target is $3.80. If it closes above that level, the second target price is $4.70.
Stop Loss: To limit risk, place a stop loss at $1.90. Note that the stop loss is on a closing basis.
Our target potential upside is 43% to 90%.
For a risk of $0.70, our first target reward is $1.20, and the second target reward is $2.10. 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.
TVGN – Consolidated Statements of Operations
- The company’s executive officers, directors, and principal stockholders and their affiliates own approximately 90% of the outstanding shares of Common Stock, and TVGN’s Chief Executive Officer, Dr. Ryan Saadi, owns approximately 72% of the outstanding shares of Common Stock. This concentration of ownership could limit the company’s ability to influence the outcome of key transactions, including a change of control.
- TVGN has a limited operating history, and no products approved for commercial sale and has never generated revenue from product sales.
- The company’s business is highly dependent on its first product candidate, TVGN 489. The company is expected to spend substantial amounts of cash to continue the preclinical and clinical development of its current and future programs.
- Hedge Funds Decreased Holdings by 5.1M Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
- Despite being a loss-making company, the executives are being paid significant compensation.
TVGN – 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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