IsoRay (ISR) inspired me like few biotech stocks have in May. But now it's June, so where is IsoRay heading? Take a hard look at its chart.
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This is a tough call. The downtrend could be a deceptive head-fake. On the other hand, the stock may be retracing. There is a hefty gap that most likely will get re-filled.
Commentary
I prefer not to be negative about IsoRay, and I'm not, but this may be an example where the share price went up too fast. Investors may see the share price settle back, retrace and churn, before beginning the next leg up. I also observe that the stock may be overbought, so for new investors this may be the ideal time to sit back and wait the situation out. Wait and see where the stock price goes before committing any of those hard-earned dollars.
Buyers Wait
These days going into cash may not be a bad idea, especially when that dry powder affords you to buy a stock like IsoRay at a much lower price. This is where discipline steps in because you have to ignore the opinion polls and stick to what the charts tell you. IsoRay is in an all-out war between the bulls and the bears, so the wise investor will wait to see who gains the upper hand before buying in. This, of course, assumes the risk of missing the next big run, but it also protects the investor should the stock price see a significant drop. Either situations seem tenable. It will be interesting to see in a matter of weeks how IsoRay plays out.
Long-Investors Could Average In
There is more than one investor who thinks that IsoRay's future is much larger than the present. I accept that. This company's common share float is extremely low and the company is making substantial progress. Recently the company announced:
Babcock says this latest achievement comes on the heels of the Company's reintroduction of the GliaSite® radiation therapy system and introduction of Cesium-131 sutures and mesh to the international medical community at the World Congress of Brachytherapy where they all drew strong interest. According to Babcock, these developments are in keeping with the Company's strategic objectives. "IsoRay remains focused on meeting a primary goal of being an innovator with the creation of ground-breaking products that are proving to be vital weapons in the treatment of a number of cancers throughout the body. This product portfolio is central to our goal of growing revenues and creating value for our stockholders."
In the final analysis I've seen one too many biotechs fill their share price gap, but IsoRay may have much more substantial upside. I commend investors to study this one carefully.
Disclaimer: Investors buy and/or sell at their own risk.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
