Inhale this. (February 09, 2015)
I want to look at Mannkind ( NASDAQ:MNKD ) today in the “Free” video. This is a stock that I’ve been covering for our members for the last week or so. It would have been nice to be covering it from the initial squeeze but we didn’t get in to it that quickly. This is a company that makes Afrezza, which is an inhalant insulin delivery system, so you inhale it; it’s like what people take for COPD or asthma, or stuff like that.
The big hit here was because a lot of folks were concerned that even though the company got approval by the FDA for Afrezza, that they were going to run out of money before they could do anything; which to me seems kind of silly, but what do I know, it’s really what the stock knows. So they’ve got a marketing deal with Sanofi, they’re actually starting to market the drug delivery system this month. I saw a pretty prominent question being asked among analysts; there’s been no poll taken among folks with diabetes as to whether they would feel comfortable using this in a restaurant.
My suggestion would be that maybe you stop and think about what the alternative is. I’m being really delicate with my language, which is actually quite rare for me, but if you’re a diabetic and you need to get insulin and you’re sitting in a restaurant, what would you rather do? Bust out the needle or inhale and breathe it in? For whatever reason you don’t want people to see you breathing something in because maybe they think you’re inhaling marijuana or something; go to the bathroom. You go to the bathroom, what are you going to do? Would you rather have the needle or would you rather inhale.
The bottom line is, in my view, this is going to be a very widely adopted insulin delivery system. Frankly it’s going to change that field, it’s going to change that industry, and I think that’s what traders are starting to see here. By the way, to you skeptics, yes I know about the contra indications. Well guess what? Not everybody gets to use it, if you’re a smoker or you’ve got COPD, or a few other things. So what? There are still quite a few people who don’t have to deal with those contra indications.
So my suggestion is, look at the short interest in the stock; look at the trend, look at the weekly chart, and look at when earnings are going to be announced, which is actually pretty soon, it’s like the week after next, something like that. By the way this is the short interest ratio, but the percent of shares that are short is 30 percent, so you’ve got quite a few folks betting against this stock.
I think that puts the stock in a position to move higher. How high is it going to be before they announce earnings? I couldn’t tell you and so I’m absolutely and explicitly not saying this is going to pop and earnings, there’s going to be an upside surprise, and the stock’s going to scream. The stock may have already screamed before earnings, what I’m saying is this, I think you can buy this stock. It’s in a steep trend right now but the advantage is definitely to the bulls right now.
You buy the stock, and I’ll just ask you this, what’s the catalyst for the stock to fall between now and earnings? I can’t think of any. The only reason for the stock to fall would simply be because of an exhaustion of buying pressure. In other words the stock has moved so much, just from this last pullback it’s moved 26 percent. For crying out loud, from the bottom the stock’s moved almost 50 percent. There’s definitely going to be an exhaustion at some point.
What I would just suggest is you let the trend be your friend; you follow this stock up, maybe you can even use like, what’s a 10-day moving average look like? Lets use an 8-day moving average and even make it an exponential. You use this moving average say as a reference for stops; as long as long as the stocks trading above that level I think you’re good to go.
Free Chart