NEW BULLISH Plays
NeuroDerm Ltd. - NDRM - close: 25.71 change: +0.18
Stop Loss: None, no stop at this time.
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on September -- at $---.--
Listed on September 2, 2015
Time Frame: Exit
Average Daily Volume = 243 thousand
New Positions: Yes, see below
If the market rebound continues then biotech stocks could lead the way. The group was hit hard during the market's recent correction but they have also seen one of the biggest rebounds. NDRM appears to be something of an exception.
Shares of NDRM were not immune to the market's sharp decline on August 24th but they significantly pared their losses on that day. Furthermore NDRM was showing relative strength the several weeks leading up to the market's correction lower. The rest of the biotech industry did not perform so well as they were already correcting lower prior to the market sell-off.
NDRM is based in Israel. Their IPO was November 14th, 2014. The stock initially priced at $10.00 a share. They had a secondary offering in July this year and the stock actually rallied on the news.
The BTK biotech index and the IBB biotech ETF both peaked around July 20th this year. Currently both the IBB and $BTK are down about -13% from their July highs. During that same time frame, while the biotech stocks were falling, shares of NDRM rallied +42%.
According to the company, "NeuroDerm is a clinical-stage pharmaceutical company developing next-generation treatments for central nervous system (CNS) disorders that will make a clinically meaningful difference in patients' lives. NeuroDerm's technology enables new routes of administration for existing drugs that overcome their current deficiencies and achieve enhanced clinical efficacy.
NeuroDerm is the first to develop liquid levodopa (LD), the gold standard treatment for Parkinson's disease, thus enabling for the first time continuous sub-cutaneous (SC) administration of this drug. By overcoming its biggest deficiency - short half life - NeuroDerm's products should transform patients' lives, offering them clinical benefits that can only be obtained today by undergoing highly invasive surgery."
On the company website, if you look at their portfolio, the company says,
"NeuroDerm has developed a portfolio of product candidates that addresses major unmet needs in the field of Parkinson's disease and cognition. Specifically in the alleviation of the effects of Parkinson's disease, the company has four product candidates in different stages of development which offer solution for almost every PD patient - from the moderate to the very severe stage of the disease."
Tonight's trade is a bet on NDRM's relative strength. Like many small biotech firms NDRM does not have any sales yet. These small biotech firms tend to be binary trades. You win big or lose big based on the market's perception of the company's potential. Each and every headline regarding clinical trials or FDA approval can send a stock like this soaring or crashing. Investors should consider this an aggressive, higher-risk trade.
The point & figure chart is bullish and forecasting at $42.00 target. Technically NDRM has been able to build on its bullish pattern of higher lows. Shares look like they have been coiling for a breakout past resistance in the $26.00 area. Tonight we are suggesting a trigger to launch small bullish positions at $26.65.
NOTE: The spread on some of NDRM's options are relatively wide. Traders should consider the options a riskier bet.
Trigger @ $26.65
- Suggested Positions -
Buy NDRM stock @ $26.65
- (or for more adventurous traders, try this option) -
Buy the OCT $30 CALL (NDRM151016C30) current ask $0.90
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike