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: Absci Corporation (NASDAQ: ABSI)
Today’s penny stock pick is the AI-powered biotech company, Absci Corporation (NASDAQ: ABSI).
Absci Corporation operates as a data-first generative artificial intelligence (AI) drug creation company in the United States. The company combines AI with scalable wet lab technologies to design differentiated antibody therapeutics. Its preclinical development programs include ABS-101 for the treatment of inflammatory bowel disease; ABS-201 for treating androgenic alopecia; ABS-301 for the treatment of immuno-oncology; and ABS-501 for treating oncology. Absci Corporation has collaboration agreements with PrecisionLife, Memorial Sloan Kettering Cancer Center, Twist Bioscience, Owkin, Oracle Corporation, and Advanced Micro Devices, Inc. for joint research and development activities.
Website: https://www.absci.com/
Latest 10-k report: https://investors.absci.com/static-files/7d4e8402-0f06-4bfb-b883-06e69fe565a1
Analyst Consensus: As per TipRanks Analytics, based on 5 Wall Street analysts offering 12-month price targets for ABSI in the last 3 months, the stock has an average price target of $7.22, which is nearly 131% upside from current levels.
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The company’s generative AI for drug creation is gaining traction, with collaborations like Oracle and AMD enhancing its computational backbone. There is also a favorable bias developing towards AI-integrated biotechs like ABSI, assuming faster drug development and cost saving.
- ABSI recently raised ~$64M in July 2025 via public offering, extending cash runway to 2028 and removing short-term overhangs. This supports R&D without immediate dilution pressure.
- Corporate Insiders placed Informative Buys of Shares Worth $433.8K in the Last 3 Months.
Insiders | Source: TipRanks.com
- FDA’s plan to phase out animal testing is a modest but positive catalyst, as ABSI’s AI/wet-lab approach aligns with this shift.
- The company has a robust pipeline, with advancing programs like ABS-101 (anti-TL1A antibody) in Phase 1, and others like ABS-201/301/501 in preclinical stages.
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.
ABSI – 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 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 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.
ABSI – Weekly Chart
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#7 Bullish RSI: In the weekly chart, the RSI is above 50 and moving higher. 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 ABSI is above the price of $3.25.
Target Prices: Our first target is $4.20. If it closes above that level, the second target price is $4.90.
Stop Loss: To limit risk, place a stop loss at $2.70. Note that the stop loss is on a closing basis.
Our target potential upside is 29% to 51%.
For a risk of $0.55, our first target reward is $0.95, and the second target reward is $1.65. 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 December 31, 2024, ABSI had an accumulated deficit of $509.6 million.
ABSI – Consolidated Statements of Operations
- For the years ended December 31, 2024, and 2023, revenue from two partners accounted for 99% and 89% of the company’s partner program revenue, respectively.
- ABSI’s Q2 2025 results missed expectations, highlighting ongoing hurdles in monetization and competitive pressures in biotech.
- The biotech funding environment remains tight, and competition from larger AI-biotech players could limit partnerships. While recent funding helps, future raises could pressure the stock if growth slows.
- Despite being a loss-making company, the executives are being paid significant compensation.
ABSI – 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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