This post was just published on ZYX Buy Change Alert.
On February 1st we issued a call to take profits on MNTA. Depending upon how you traded, your profits would have been 74%.
We got out at the top. Now the stock has fallen providing an opportunity to enter again. The buy zone is $12 to $15.35, preferably below $14.31. The stock is trading at $15.30 as of this writing. The target zone is $18 to $20, and $24 to $28 in the event of a buyout. Stop zone on one-half of the position is $11 to $11.38.
Those who are not aggressive may consider accumulating only on a dip in the $12 range.
Recommended quantity is 30% of the full core position size.
MNTA is in the business of biosimilars. In the world of biotechnology, biosimilars are just like generics in the traditional pharmaceutical world. The difference is that making a biosimilar is much more difficult than making a generic.
Most of the movements in this stock result from ups and downs related to its drug Glatopa. Glatopa is a biosimilar to Copaxone. Copaxone is a highly popular MS drug from TEVA.
The drop in MNTA stock has resulted from an FDA warning letter to PFE. PFE is the manufacturing partner for MNTA.
In our analysis, PFE should be able to resolve the issue in the near future. However the risk in MNTA stock has increased as other companies are on its heels to develop a biosimilar for Copaxone. For this reason those who are not aggressive need to wait for a dip into the $12 range; of course such a dip may never happen. Those who are aggressive may consider scaling in by starting a very, very small position right here. Please see Trade Management Guidelines.
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