Analyst Thinks This $1 Stock Has 900% Upside Potential

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: Imunon, Inc. (NASDAQ: IMNN)

Today’s penny stock pick is the clinical-stage biotechnology company, Imunon, Inc. (NASDAQ: IMNN).

Imunon, Inc. engages in the development of immunotherapies and vaccines to treat cancer and infectious diseases. The company’s lead clinical program IMNN-001, a DNA-based immunotherapy for the localized treatment of ovarian cancer that is in Phase II clinical development. Its preclinical stage products include IMNN-101, a COVID-19 booster vaccine; IMNN-102 for the treatment of Lassa virus; and IMNN-201, a Trp2 tumor associated antigen cancer vaccine in melanoma.

In addition, the company develops non-viral DNA technology across four modalities, such as TheraPlas for the coding of proteins and cytokines in the treatment of solid tumors; PlaCCine for the coding of viral antigens that can elicit a strong immunological response; FixPlas for the application of Imunon’s DNA technology to produce universal cancer vaccines; and IndiPlas, which is in the discovery phase for the development of personalized cancer vaccines or neoepitope cancer vaccines. Imunon, Inc. was formerly known as Celsion Corporation and changed its name to Imunon, Inc. in September 2022.

Website:  https://imunon.com

Latest 10-k report:  https://investors.imunon.com/static-files/0cf25090-d6be-45eb-bd35-ecea6c773226

Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for IMNN in the last 3 months, the stock has an average price target of $12.00, which is nearly 908% upside from current levels.

Potential Catalysts / Reasons for the Hype:

• The company is set to announce topline results from its Phase 2 OVATION 2 Study on July 30, 2024, at 8:00 a.m. Eastern time. The study focuses on IMNN-001, the company’s DNA-mediated immunotherapy for advanced ovarian cancer. The results are rumored to be highly positive.

On analyzing the company’s stock charts, there seem to be multiple bullish indications…

Bullish Indications

#1 Symmetrical Triangle Pattern: The daily chart shows that the stock is currently forming a symmetrical triangle pattern, which is marked as purple color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend.

#2 Price above MA: The stock is currently above its 200-day SMA, indicating that the bulls are currently in control.

#3 Bullish RSI: The RSI is currently nearing 50 and moving higher, indicating possible bullishness.

#4 Bullish Stoch:  The %K line of the stochastic is above the %D line, and has also moved higher from oversold levels, indicating possible bullishness.

#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. The stock is also trading above its 50-week SMA, indicating that the bulls are gaining control.

#6 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.

#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 IMNN is above the price of $1.45.

Target Prices: Our first target is $2.50. If it closes above that level, the second target price is $3.30.

Stop Loss: To limit risk, place a stop loss at $0.90. Note that the stop loss is on a closing basis.

Our target potential upside is 72% to 128%.

For a risk of $0.55, our first target reward is $1.05, and the second target reward is $1.85. 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:

1. The company has a history of net losses. For the years ended December 31, 2023, and 2022, IMNN incurred net losses of $19.5 million, and $35.9 million, respectively.
   

   IMNN – Consolidated Statements of Operations

2. The company has a history of legal proceedings. On October 29, 2020, a putative securities class action was filed against the Company and certain of its officers and directors in the U.S. District Court for the District of New Jersey, captioned Spar v. Celsion Corporation, et al., Case No. 1:20-cv-15228. In February 2021, a derivative shareholder lawsuit was filed against the Company, as the nominal defendant, and certain of its directors and officers as defendants in the U.S. District Court for the District of New Jersey, captioned Fidler v. Michael H. Tardugno, et al., Case No. 3:21-cv-02662.
3. The company requires substantial future capital requirements to continue its research and development activities and advance its drug candidates through various development stages, failing which the company may not be able to complete the development, testing, and commercialization of its drug candidates.
4. The company faces significant competition from major pharmaceuticals, specialized technology companies, universities, and other research institutions. These competitors have substantially greater financial, technical, human and other resources, and greater experience in pre-clinical testing and human clinical trials of new products and in obtaining FDA and other regulatory approvals. IMNN’s failure to compete effectively could adversely affect its ability to develop and market its products.
5. On December 26, 2023, IMNN received a notice from the staff of the Nasdaq Stock Market LLC notifying that, based upon the closing bid price of the company’s common stock, for the 30 consecutive business days prior to the notice, IMNN no longer met the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).
6. Despite being a loss-making company, the executives are being paid significant compensation.
   

   IMNN – 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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Source: Trades of the Day