Did you miss the initial Ebola rally, led by Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) and Lakeland Industries, Inc. (NASDAQ:LAKE)? Don't sweat it - you're not alone. And if you were thinking about diving into either of those names now, forget about it. Both LAKE and TKMR are overbought, and are guaranteed to be volatile (read "unpredictable") in the future. It's not too late to get in on Ebola-mania, however.
Ever heard of PositiveID Corp. (OTCMKTS:PSID)? Most people haven't, so don't worry if it's an unfamiliar name. What's surprising is that PSID is still a little unfamiliar to the masses at this stage of the Ebola game. It's not just a worry that we only have to worry about domestically. It's now spreading within the United States, which is a whole different ball game than preventing it from getting to the United States. This presents a real risk of pandemic spreading within our borders. PositiveID can help.
As for what PositiveID Corp. does, it's not even comparable to Tekmira Pharmaceuticals or Lakeland Industries. LAKE makes surgical masks and gowns worn by those treating at-risk patients, while TKMR makes drugs, and holds the honor of being the first to produce a pharmacological treatment that successfully treated someone who had contracted Ebola this particular time around. PSID manufactures handheld equipment that can detect the presence of several viruses, including Ebola.
The need for such a device was clear before October, when the contagion quickened. It just wasn't appreciated. Almost needless to say now, a handheld Ebola detector is worth its weight in gold to the workers who may be exposed to it in a field setting. Although PositiveID Corp. hasn't even hinted at increased interest in its wares, one has to assume interest is growing, and funding is being secured.
Be that as it may, the real story here - right now - isn't the underlying technology. It's the stock, and more specifically, the shape of the PSID chart. It suggests a long-brewing breakout is being unleashed.
The underlying theme here is, "second wind." PositiveID shares started a breakout a week ago with a thrust above all of its key moving averages and above a long-standing resistance line. That effort faded about as quickly as it started, however, and sent shares almost back to where they started. The bulls weren't done with PSID yet, though, and pushed up and off a couple of key short-term moving average lines to renew the effort. And this time, the pace seems to be more sustainable.
To really appreciate how well this chart broke out of a bearish groove and moves into a bullish groove, though, one has to take a step back and look at the weekly chart. It's in this timeframe we can see how big of a deal the break past a major resistance line is; there's nothing else to get in its way from here.
None of this is to say Tekmira Pharmaceuticals Corporation or Lakeland Industries, Inc. would be poor trades from here. It's just to say that, from where all three stocks sit, TKMR and LAKE are coin tosses. PSID at least has a calculable, compelling risk/reward ratio.
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