Seres Therapeutics Inc. (MCRB) is approaching a key level of resistance. If this level is surpassed, a breakout could occur.
MCRB is a microbiome therapeutics platform company operating in the United States. The company is engaged in developing biological drugs which are referred as ecobiotic microbiome therapeutics.
The drugs discovered by the company are designed to restore health by repairing the function of a dysbiotic microbiome. MCRB has six drugs in various stages of development. These range from drugs that fight Clostridium difficile, or C diff, and colitis to metastatic melanoma.
The company had $254 million in cash and short-term investments at the end of last year, compared with no short-term debt. But MCRB currently has a negative profit margin. MCRB’s hasn’t shown positive earnings over the last six years, but sales were up 130.4% year over year in the most recent quarter.
Based on its price-to-sales and price-to-book ratios, the company is currently overvalued. The stock was trending lower from February 7th to March 3rd, but has shown mixed performance since.
Take a look at the 1-year chart of MCRB below with the added notations:
Over the past nine months, MCRB has formed an important level to watch at the $22.50 (blue) mark. This level has provided both support and resistance repeatedly.
MCRB is currently sitting just under that level now, and a rally higher could bring another $22.50 resistance test. A trader could enter a long trade a break back above the $22.50 mark with the expectation of a breakout..
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MCRB shares were unchanged in premarket trading Monday. Year-to-date, MCRB has declined -15.39%, versus a 11.71% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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