Outlook Therapeutics Inc [NASDAQ: OTLK] was one of the best stock performers yesterday. At the close of trading, the stock was up by about 68%. It seems to be sustaining this momentum in pre-market trading, where it is up by over 10%, and gaining. OTLK started gaining bullish moment after Oppenheimer gave this stock an ambitious target of $12. This excited the market, and saw the stock gain fast, crossing above $1.
The bullish outlook that this stock has received is backed by some solid fundamentals. On May 15th, the company announced its financial results, including highlights of its achievements. One of them is that the FDA had accepted and activated the company’s IND application for ONS-5010. The company has also started clinical trials for phase 3 of ONS-510-002. The company also announced that the financing it had announced in April through the issuance of common stock had raised $28.4 million. According to the company’s CEO, the financing they have secured will help them complete phase 3 clinical trials. It puts the company on track to the clinical development of ONS-5010. This may explain the ambitious target by Oppenheimer and the increased bullish momentum around this stock. That’s in spite of the fact that the company recorded a net loss in the quarter ending March 31st.
Looking at the price action, the stock is currently retracing after hitting a high of $1.75 yesterday. This correction has seen it break key support at $1.549 on the 200-day MA. Currently, it seems to be regaining bullish momentum, but it has some serious resistance at $1.549 which is now resistance. If it breaks above this price and extends above the 50-day MA at $1.571, it could possibly trade in the green in Friday trading. Such price action could see it retest yesterday’s high of $1.75. However, in the event that it fails to push above $1.549, it could correct further and possibly test $1.427 a level at which, it experienced some level of support in yesterday’s trading. Longer-term, on the 1-month chart, OTLK is consolidating after a strong bullish reversal from a low of $0.91. This consolidation is happening above a key support level on the 200-day MA at $1.38. If current bullish momentum continues, it could possibly target $1.94, which is a key resistance level on the 100-day MA.
Looking at analysts’ recommendations of this stock, most of them are bullish. OTLK has an analyst recommendation of 2, which is a buy. Some analysts have also recently upgraded this stock to buy status. The latest one to upgrade it was Ascendiant Capital. On the 22nd of April, Ascendiant capital initiated the upgrade of OTLK to buy. It’s good indicator that bullish sentiment around this stock is strong. However, the direction it will go depend on lots of factors including the success of its phase 3 clinical trials.