ClearPoint Sees Breakout as it Pursues Brain-Computer Interface Alongside Elon Musk
The small biotech stock is seeing shares gain momentum amid comparison's to Musk's pursuit of BCI technology.
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Corrective market action continued on Tuesday morning but this time, there is less small-cap speculation and more rotation into the Magnificent Seven MAGS names. Breadth is poor, with about 3,000 gainers to 6,000 decliners. New 12-month highs are down to around 150 names, but all the Magnificent Seven names are in the green.
Typically, Magnificent Seven names benefit when investors are growing nervous and are moving into stocks that they view as "safe" even though the valuations appear to be quite aggressive.
On Monday, there was very aggressive selling of the biggest winners of the year. According to Bespoke Investment Group, all 26 of the Russell 1000 stocks that had doubled so far this year were down with an average loss of 5.1%. That is a textbook example of profit-taking, and there is some continuation today, but the action is much more mixed.
I’m still hunting for some good technical setups to buy and am not inclined to do much chasing outside of quantum computing play Rigetti Computing RGTI. I believe that this one could see continued momentum.
Back on November 12, I discussed "Four Small Biotech Stocks With Great Promise." I still like all four and wanted to update what has happened in the past month:
ClearPoint CLPT has made a big breakout move in the last two days. What appears to be moving the stock is a comparison to Elon Musk’s Neurolink technology, which uses brain-computer interface (BCI) technology to allow a person to control a device using their brain signals. BCIs detect brain signals, analyze them and translate them into commands that are sent to an output device. Musk is working on this in his private company but CLPT is a leader in robotic neurosurgery using 3D MRI and is a way for the public to invest in BCI. I expect it to stay in play and will be looking for additional entries.
Xeris XERS has continued to act very well and now seems to have strong underlying support as investors look forward to a new product next year with very large market potential. There is also the potential for a partnership deal, but the main thing is that all three of its current products are still producing 20% annual growth. Technically, the stock broke out and is now consolidating at highs. I’m looking to add as conditions develop.
Humacyte HUMA, HUMAW continues to be extremely frustrating. The FDA is now around four months late in approval of its artificial vein for the treatment of trauma. Management is hopeful that they will hear something within "weeks or months," but because this is new, innovative technology, they don’t want to rush the FDA by requesting a formal meeting. Until this uncertainty is lifted, the stock will drift, but this is exciting technology, and there is excellent upside should the FDA issue approval.
Delcatch DCTH has bounced back to highs and is not consolidating on low volume. I don’t expect it to do too much until it has some news flow after the first of the year, but the chart looks good, and I’ll continue to look for an entry point.
At the time of publication, DePorre was long RGTI, CLPT, XERS, HUMA and DCTH.
