Let me paint you a picture as to why I am expecting ACRV to jump tomorrow or next week.
This biotech company had been running up since September. Everything was going well until they released some positive trial results on January 8th and the stock fell \[See photo 1\].
But if the results were good, why did the stock tumble? Because the price had been running up since September! The market was pricing in great results, not good results. Additionally, the company had announced on January 6th that they would be publishing data on the 8th, setting up a classic “buy the rumor and sell the news” situation.
So why do I think the stock will bounce? A couple reasons. First, the company is in a great position. They have a promising cancer drug candidate heading for phase three and $119 million of cash and equivalents. Second, there are LOTS of shorts that just entered green after being deep in the red for a while \[See photo 2 and remember that this stock has been only going up since September\]. The shorts probably weren’t stressing though since cost to borrow had been basically zero this entire time. Which brings me to my third reason. Three, the CTB is climbing! It went from almost 0% to around 60% in three days. For the first time, these shorts are having to pay a significant amount to keep their positions open. And as a little cherry on top of all this… Four, a Form 4 dropped in the after hours tonight showing that their COO bought 10,000 shares when the price took a dive.
These 4 wheels are going to drive this stock’s price north for the winter. Wtf do I mean by winter? I am glad you asked. There are absolutely no upcoming anticipated events or catalysts until the FDA gives feedback on their phase 3 trial application MONTHS from now. The big event has already passed. If I was shorting this stock, I’d be in the green, not anticipating any price movement anytime soon, and now paying to keep my position open.
So, all this to say, I am anticipating some shorts closing out and the market bouncing back from that massive sell off.
God bless America. Thank you, and good night.