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: MAIA Biotechnology, Inc. (NYSE: MAIA)
Today’s penny stock pick is the clinical stage biotechnology company, MAIA Biotechnology, Inc. (NYSE: MAIA).
MAIA Biotechnology, Inc. engages in the discovery, development, and commercialization of therapies targeting cancer. The company’s lead product candidate is THIO, a telomere-targeting agent that is in Phase II clinical study to evaluate its activity in patients with non-small cell lung cancer. It is also developing second generation telomere targeting agents.
Website: https://www.MAIABiotech.com
Latest 10-k report: https://ir.maiabiotech.com/sec-filings/all-sec-filings/content/0000950170-23-009766/maia-20221231.htm
Analyst Consensus: Not covered by Wall Street Analysts.
Potential Catalysts / Reasons for the Hype:
- The company recently announced a positive Phase 2 non-small cell lung cancer (NSCLC) clinical trial data for THIO-101 and outlined key clinical milestones for 2024.
- Rumors of a possible buyout.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern: 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 currently looks poised for a breakout from the falling wedge pattern. Once the stock breaks out of the falling wedge pattern, it could move higher.
MAIA – 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 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.
MAIA – 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 MAIA is above the price of $1.55.
Target Prices: Our first target is $2.40. If it closes above that level, the second target price is $3.00.
Stop Loss: To limit risk, place a stop loss at $1.10. Note that the stop loss is on a closing basis.
Our target potential upside is 43% to 90%.
For a risk of $0.45, our first target reward is $0.85, and the second target reward is $1.45. 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. MAIA incurred net losses of $15,769,279 and $12,578,211 for the years ended December 31, 2022, and 2021, respectively. As of December 31, 2022, the company had an accumulated deficit of $44,207,272.
MAIA – Consolidated Statements of Operations
- The company is heavily dependent on the success of THIO, its most advanced candidate, which is still under clinical development.
- Based on the company’s cash reserves as of December 31, 2022, of $10.95 million and current financial condition as of the date of the Annual Report on Form 10-K, the company may require additional capital to fund its operations. Raising additional capital may cause dilution to the stockholders, restrict the company’s operations, or require the company to relinquish rights to its technologies or product candidates.
- Despite incurring net losses, the company executives are being paid significant compensation.
MAIA – 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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