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: Gain Therapeutics, Inc. (NASDAQ: GANX)
Today’s penny stock pick is the biotechnology company, Gain Therapeutics, Inc. (NASDAQ: GANX).
Gain Therapeutics, Inc. develops novel small molecule therapeutics to treat diseases across various therapeutic areas in Switzerland, Spain, the United States, and Australia. Its drug discovery platform Magellan discovers novel allosteric binding sites in a disease; identifies proprietary small molecules that bind these sites to modulate protein function; and treats the underlying cause of the disease.
The company’s lead drug candidate is GT-02287, which is currently in a Phase 1b study for the treatment of Parkinson’s disease with or without a GBA1 mutation. It has various small molecule drug candidates, which are in the discovery, research, and preclinical stages for the treatment of dementia with Lewy bodies, Alzheimer’s disease, and Gaucher’s disease, lysosomal storage disorders, metabolic disorders, and solid tumors.
Website: https://gaintherapeutics.com/
Latest 10-K report: https://s3.amazonaws.com/sec.irpass.cc/2997/0001558370-25-003823.pdf
Analyst Consensus: As per TipRanks Analytics, based on 6 Wall Street analysts offering 12-month price targets for GANX in the last 3 months, the stock has an average price target of $8.00, which is nearly 260% upside from current levels.
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The company’s recent interim results from the Phase 1b trial of GT-02287 showed improvements in MDS-UPDRS scores for Parkinson’s patients, including those with GBA1 mutations. The drug’s potential as a disease-modifying therapy in a high-unmet-need area like Parkinson’s is a key driver. KOL event scheduled for October 14, 2025 is likely to provide deeper insights.
- Rumors of acquisition.
- Growing sector interest. There is now a broader biotech rebound, with small-cap names like GANX benefiting from renewed investor interest in rare disease pipelines.
- Full Phase 1b data is expected in Q4 2025. Building on interim results, positive full readout could validate efficacy further.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out a symmetrical triangle pattern with high volume. This is marked with purple lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend.
GANX – 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 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 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.
GANX – 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 GANX is above the price of $2.25.
Target Prices: Our first target is $3.20. If it closes above that level, the second target price is $4.00.
Stop Loss: To limit risk, place a stop loss at $1.70. Note that the stop loss is on a closing basis.
Our target potential upside is 42% to 78%.
For a risk of $0.55, our first target reward is $0.95, and the second target reward is $1.75. 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.
GANX – Consolidated Results of Operations
- The company faces competition from larger players in the Parkinson’s space.
- The company has cash burn, which is typical for clinical-stage companies. But there is a possibility of potential dilution from future offerings to fund trials.
- The company has ongoing legal proceedings. On September 18, 2024, Matthias Alder filed suit against the company in the Circuit Court of Maryland for Montgomery County, alleging breach of Separation Agreement and employment agreement with Mr. Alder by failing to pay certain severance amounts and alleging that the company violated non-disparagement obligations to Mr. Alder.
- In the past, GANX had received notices from the Nasdaq’s Listing Qualifications Department indicating non-compliance with certain of the Nasdaq Global Market’s continued listing standards.
- Despite being a loss-making company, the executives are being paid significant compensation.
GANX – 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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