Esko bionics (NASDAQ: ESKO) is causing the eyes of investors light up with money symbols after the FDA gave the green light yesterday. While volatility is high, the future is showing signs of upward growth. However, the bears could ignite a sell-off at any point. Making many investors wonder, is Esko Bionics a good investment? Let us solve this investing dilemma.
Table of contents 1. FDA approval causes a massive ESKO rally 2. Is Esko Bionics a good investment
Why is ESKO up?
Esko Bionics holdings announced today that the “FDA gave the clearance for ESKO to market its EskoNR robotic exoskeleton for use with patients with acquired brain injury (ABI)”.
For investors to truly understand the significance of this milestone, we must know what ABI is and the existing standard of care. ABI is the blanket medical term for brain injury. Acquired Brain Injuries are split into Traumatic (TBI) and non-traumatic (n-TBI). Examples of Traumatic injuries include severe head injuries and concussions. Whereas examples of non-traumatic would consist of strokes, tumours or aneurysms. Unfortunately, there is no existing care for the rehabilitative devices for ABI, until now. Thus, ESKO’s FDA clearance marks the inauguration of exoskeletal devices being used for patients suffering from ABI.
Essentially, ESKO is a first market mover, ultimately injecting the bulls with steroids. Also, FDA approvals are the biggest catalysts in the biotech industry, often triggering gigantic rallies. Thus, it should come as no surprise that ESKO soared 170% on Thursday, and is now up 30% in pre-market (at the time of writing).
Is ESKO worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Short answer: Esko has potential to be a viable investment (opinion not advice)
Technical chart Analysis
Using hindsight, we can say the ESKO chart is extremely bullish. However, that is looking back. Looking forward, it seems support roughly sits at the $7. Thus investors looking to join the ESKO party should wait and see if the support holds up to mitigate the risk of being caught with bears (opinion not advice). Because of the supports fall below $7, then bears own the chart, and the money might have already been made. Nonetheless, the simple moving average is rising which promises a strong signal for long-term investors (opinion not advice).
Also, ESKO’s resistance level is sitting around the $8.75 mark. However, Esko is up 29% pre-market trading, meaning they will crush that resistance level at open. Thus, we should see a higher resistance level set in today’s trading. However, the real dilemma is will ESKO fall below the $7 support. Hence, I would watch the activity for the first few hours to gauge the new buying and selling direction. In simple a higher support levels means the bulls own the chart and a lower support levels mean the bears are multiplying.
Biotech catalyst and future direction for ESKO
Receiving the FDA green traffic light is a major milestone for ESKO. Hence, day and swing traders are flocking towards the biotech, and long term investors are cashing out or topping up. We should see volatility for the next few days, even a possible sell-off. However, ESKO now holds power to market EksoNR, which significantly improves its future revenue prospects. The rise in revenue should allow Esko to transform their current financial nightmare into a biotech’s dream. Thus, taking the long-term approach could increase your probability of making a profit. (opinion not advice) However, if you decide to invest in ESKO, make sure it reflects your investing needs and not the needs of financial institutions.
If you enjoy our article or are wanting to learn more, you can subscribe to us for free via email and get updated when we post a new article. From all of us at YIG, thank you for the support.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Here is our free, uncomplicated, and extensive ASX portfolio
Want access to free, uncomplicated, and smart COVID-19 Strategies then click below?
Written by Patrick McLoughlin, Senior Manager of YIG.