Rosetta Genomics Ltd. (Rosetta) develops and commercializes diagnostic tests based on microRNAs. The Company has a clinical laboratory improvement amendment (CLIA)-certified laboratory in Philadelphia, which enables Rosetta to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. On February 4, 2010, the Company established Rosetta Green Ltd. (Rosetta Green) as a controlled subsidiary. As of December 31, 2010, it owned approximately 76.2% of interests in Rosetta Green. The Company’s wholly owned subsidiary, Rosetta Genomics Inc., serves as its agent for service of process in the United States. In December 2010, Rosetta launched its fourth product miRview mets2. Using Rosetta’s intellectual property, collaborative relationships with commercial enterprises and academic and medical institutions, it has initiated microRNA-based diagnostic programs for various cancers.
Faizan's Take
ROSG last closed at $11.95 a share, its chart has taken up a very interesting form which I have rarely seen in the stock market. Technical analysis shows that the stock is possibly positioning itself for a huge upward move.
Some points to note are:
1. ROSG successfully broke above the 50 day MA and the 200 day MA on immense upside volume. The fact that this has happened after more than three years of trading makes this breakout potent.
2. RSI line has moved up in the positive region.
3. A golden cross of the moving averages is forming after several years of trading.
4. The stock has made a huge move recently. In the last two months it has increased in value by about 300%.
5. Finally, the stock has broken above the Ichimoku cloud after several deliberations as shown in the image below.
All these signals combined are signalling that ROSG might be skyrocketing pretty soon. However, I must also note that ROSG is a very high risk stock.
How risky?
Let me clarify that this pick is only for aggressive high risk investors. Therefore if you are looking for a small but guaranteed trickle of upward moves than this is not for you. This stock is the kind that can double in value overnight and can also fall to half of its worth overnight.
Just like any bio med company ROSG's stock is highly sensitive to news about its products and therefore even a small punch can throw its price back to the ground. The probability of such a thing happening might be low however, I will still warn investors to understand this risk before jumping in.
Trade plan
I recommend assigning ROSG a very small portion of your portfolio. Small enough so that even if ROSG takes a downturn it won't hurt your overall performance, but size-able enough so that if it skyrockets you can make decent money.
Selling points for ROSG can vary depending on your preference. Just to point out there are small resistances at $20 and $30 and a major one at $70. For more risk averse people maybe a $20 target will suffice.
Hope you enjoyed reading. Feel free to leave any questions or comments below the post.
