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: Gossamer Bio, Inc. (NASDAQ: GOSS)

Today’s penny stock pick is the clinical-stage biopharma company, Gossamer Bio, Inc. (NASDAQ: GOSS).

Gossamer Bio, Inc. focuses on developing and commercializing seralutinib for the treatment of pulmonary arterial hypertension (PAH) in the United States. The company is developing GB002, an inhaled, small molecule, platelet-derived growth factor receptor, or PDGFR, colony-stimulatin factor 1 receptor and c-KIT inhibitor, which is in Phase 3 clinical trial for the treatment of PAH. It has license agreements with Pulmokine, Inc. to develop and commercialize GB002 and related backup compounds. The company was formerly known as FSG, Bio, Inc. and changed its name to Gossamer Bio, Inc. in 2017.

Website:  https://www.gossamerbio.com/

Latest 10-K report:  https://ir.gossamerbio.com/static-files/269522eb-d889-4d51-bfe5-4c65ff82806c

Analyst Consensus: As per TipRanks Analytics, based on 6 Wall Street analysts offering 12-month price targets for GOSS in the last 3 months, the stock has an average price target of $11.25, which is nearly 197% upside from current levels.

Analysts | Source: TipRanks.com

Potential Catalysts / Reasons for the Hype:

  • The company has a strong pipeline momentum, particularly with the completion of enrollment in the Phase 3 PROSERA study for PAH treatment, with top-line data expected in February 2026.
  • Hedge Funds Increased Holdings by 2.8M Shares Last Quarter.

    Hedge Funds | Source: TipRanks.com

  • The company has entered into an option agreement to acquire Respira Therapeutics and its lead candidate RT234 (an on-demand inhaled therapy for pulmonary hypertension), which could expand GOSS’s respiratory portfolio and trigger additional milestone-based stock issuances.

On analyzing the company’s stock charts, there seem to be multiple bullish indications…

Bullish Indications

#1 Ascending Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out an ascending triangle pattern, which is marked as purple color lines. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend.

GOSS – 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 and 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. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are gaining control.

GOSS – Weekly Chart

#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, the ideal buy level for <> is above the price of $3.85.

Target Prices: Our first target is $5.70. If it closes above that level, the second target price is $7.00.

Stop Loss: To limit risk, place a stop loss at $2.80. Note that the stop loss is on a closing basis.

Our target potential upside is 48% to 81%.

For a risk of $1.05, our first target reward is $1.85, and the second target reward is $3.15. 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:

  1. The company has a history of net losses. As of December 31, 2024, the company had an accumulated deficit of $1,268.6 million.

    GOSS – Consolidated Statements of Operations

  2. Merck’s Winrevair (sotatercept) poses significant competition to Gossamer Bio’s seralutinib in the PAH/PH-ILD space due to its impressive clinical data, FDA approval, and potential for a large market share.
  3. The company’s only product candidate is currently in Phase 3 clinical development. If GOSS is unable to advance seralutinib in clinical development, obtain regulatory approval and ultimately commercialize seralutinib, or experience significant delays in doing so, its business will be materially harmed.
  4. Despite being a loss-making company, the executives are being paid significant compensation.

    GOSS – Executive Compensation

  5. The company has a past of Phase 2 disappointment for the drug seralutinib in pulmonary arterial hypertension (PAH) trials. While the trial met its primary endpoint, the results fell short of investor expectations and were perceived as disappointing when compared to a competitor’s drug

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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