The setup: MediciNova, Inc. (MNOV) has a Phase 2B trial for MN-166, ibudilast, indicated for progressive multiple sclerosis. The data will be released Oct. 28 at the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) annual meeting. Typically, there’s a really nice run-up for companies that have later-stage trial results for a major disease like MS coming out on a specific date.

The back story: MediciNova is a low-float stock that doesn’t trade much, so you have to be careful. It has a market cap of just $20.67 million, so it’s not very liquid, which can be risky. On Thursday, trading volume was just shy of 150,000 shares, but that was a high-volume day; the average is closer to 50,000 shares traded per day.

How I’m playing it/what I’m looking for: I already have 1,000 shares purchased Sept. 6 at $5.22. As of Thursday’s close, MNOV is at $5.88.  I’d be looking to add to the position, buying on the dips, but only if it retraces to $5.50 or so. I’m planning on holding Medicinova at least until it hits $6.50 or gets within a week or two of that data release in late October.

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Kyle Dennis runs Kyle Dennis’ Biotech Breakouts (biotechbreakouts.com). He is an event-based trader, who prefers low-priced and small-cap biotech stocks.  He currently holds 1,000 shares in MNOV, purchased Sept. 6 at $5.22 per share; he has no options or open orders in the stock.

 

Author: Kyle Dennis

Straight outta college Kyle Dennis taught himself to trade, and then made over $7 million in trading profits by the time he was 28 years old. Kyle reveals how to find, track, and profit from lucrative trades for exceptional profits. Thousands of traders follow him every day to learn how to target these high probability trades.

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