The only reason to trade penny stocks is for the explosive moves they can make. If a penny stock doesn’t have triple-digit or 10-bagger potential, there’s no reason to really be owning them. We at Insider Financial understand this and we spend our time hunting for penny stocks that can make big moves. Decision Diagnostics Corp (OTCMKTS:DECN) is one such stock has taken the market by storm this year. The stock is up by more than 2000% for the year, even on the broader stock market turning bearish at the backdrop of coronavirus pandemic.
The key with trading penny stocks is identifying the momentum before it happens. Decision Diagnostics is a stock that we are well familiar with. We first covered the company in 2016 when it made a similar move. Worth noting is that we still have not hit the high in 2016 of $.61 a share.
Decision Diagnostics Price Analysis
The blockbuster run has coincided with an uptick in investors’ sentiments about Decision Diagnostics Corp long-term prospects. The company is on the cusp of being one of the key players in combating the deadly coronavirus.
The company is currently awaiting regulatory approval for a game-changing C0VID-19 screening method that could allow up to 80% of suspected carriers to exit quarantine systems. The milestone that the company has achieved in developing the new system and seeking regulatory approval explain why the stock is running on market volume.
The stock continues its bullish run as it trades in a steep uptrend. Pullbacks have so far acted as buying opportunities, from where buyers have come in and continued to push the stock higher. After a recent pullback to the $0.20 level, the stock has once again started running as the company enters a crucial period in the approval of its COVID-19 screening method.
A rally followed by a close above the $0.30 level should affirm the recent breakout paving the way for the stock to register new two-year highs. Support on any pullback is currently seen at the $0.18 mark, from where Decision Diagnostics Corp remains well supported.
About Decision Diagnostics Corp
Decision Diagnostics Corp casts itself as a leading manufacturer and distributor of diabetic test strips. The company’s products are designed to operate efficiently and less expensively. In the recent past, the company has focused its resources on the development of COVID-19 test kits, having sensed a massive business opportunity.
COVID-19 Test Kits Opportunity
Decision Diagnostic’s Corp has risen from the dead, and continues to power up the ladder, on developing test skits, poised to enhance the screening of COVID-19. Demand for such kits is at an all-time high, as governments around the world race against time to avert further spread. The unveiling of a simple to use and cost-effective product for screening COVID-19 is the catalyst fuelling the stock’s price action.
“Our screening method should allow for 80% of the suspected carriers of Coronavirus to exit the quarantine systems in the places where Coronavirus is rampant. However, we are not done with our Environs development. Later product entries will be test methods for Polio, Ebola (Marburg), Bird Flu, and SARS,” Keith Berman, CEO of DECN commented.
In a bid to accelerate the development of the Covid-19 test kits, Decision Diagnostics has already secured a $13 million financing as part of a non-dilutive debt financing. The financing will go a long way in helping the company accelerate the purchasing of equipment for its Korean manufacturing facility. Part of the funds will be used to finance inventory as the company looks to embark on the commercialization of the much-needed Covid-19 test kits.
COVID-19 Market Opportunity
By making available an easy to use, reliable and inexpensive test kit, Decision Diagnostics remains well positioned to generate significant amount of revenues. The U.S alone presents a unique opportunity as the government is increasingly looking for ways to accelerate testing for coronavirus to over 500,000 people a day.
The company’s test kits would also elicit strong demand at a time when most countries are looking to ease lockdown restrictions as part of the efforts of opening up the economy. Once people start going back to work or school, there will be an increasing need for testing solutions. Likewise, there is also a growing need for such solutions for use at home.
A combination of strong performance in recent months, as well as improving fundamentals, are some of the reasons to remain bullish about Decision Diagnostics. The company’s prospects are looking brighter by the day, especially on unveiling a cost-effective and reliable COVID-19 screening method.
Given the strong demand for such testing kits in the market, the company remains well-positioned to generate significant revenues once it embarks on commercialization. That said, Decision Diagnostics is a fundamentally attractive investment as a long-term play given the massive business opportunity presented by the COVID-19 pandemic.
Good luck to all (except the shorts)!
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Disclosure: We have no position in OTCMKTS:DECN and have not been compensated for this article.