Today I will analyze the case for PharmaCyte Biotech Inc. (PMCB OTCQB) as part of the deep dive into the marijuana trench. The company has developed a cellulose based live cell encapsulation technology that could become part of the drug delivery process for medical cannabis products.
PMCB has an application before the U.S. Food and Drug Administration for orphan drug status for its Cell-in-a Box treatment for pancreatic cancer.
An audit of the charts will help identify the trend, support, and resistance that are in play when it comes to this stock.
The three- year chart quickly identifies that we are dealing with a stock that has been struggling with an established downtrend line that started in February of 2014 as it came off a spike high. The retreat saw a breach of the the 50-day moving average in April of 2014 followed by a break below the 200-day moving average in August of the same year. The death cross that formed in September alerted the knowledgable investor that they could expect continued selling pressure.
What is visible on the chart is the resistance along the downtrend line and the moving averages that has taken the shares down to a 52-week of $0.04.
The six-month chart isn’t providing much evidence that we can expect a trend reversal in the near term. You should consider a couple of other things in evaluating this stock as a potential investment. It has a market capitalization of $43.9 million and it trades on the pink sheets.
The pink sheets is a high risk environment which always puts a caution flag on the track for me personally. All together the established downtrend line, resistance along the moving averages, an extremely low market capitalization, and trading in a high risk environment, make PMCB a highly speculative investment.
Next time I’ll probe OXIS International Inc. (OXIS OTCQB) on the deep dive.
Make it a profitable day and happy capitalism!