For his second "Executive Decision" segment of Mad Money Monday evening, Jim Cramer welcomed back Dr. Mitchell Steiner, chairman, president and CEO of Veru Inc. (VERU) , the oncology biotech with shares surging Monday on positive clinical trial data for its Covid-19 therapy.
Steiner explained that Veru's cancer drug Veru-111 was found to also be effective in treating Covid-19 patients in Phase II trials. He said the same therapies used to fight cancer have proven to have anti-inflammatory and anti-viral capabilities to help severe Covid patients.
Steiner added that the current standard of care for severe Covid cases is not very good and Veru hopes to work on top of existing treatments to ultimately provide better outcomes. The next step for Veru is to move quickly to Phase III trials to replicate the Phase II data, then work with the FDA toward approval which could come as early as year-end.
Let's check out the charts and indicators.
In this daily Japanese candlestick chart of VERU, below, we can see that prices were quietly trading in the $3-$2 area until recently. Prices began to creep higher in November and then exploded to the upside in early December. Prices soared five-fold from their base area and then traded sideways for about six weeks before renewed gains this month.
The trading volume is hard to read on this chart but the On-Balance-Volume (OBV) line tells a positive story. The Moving Average Convergence Divergence (MACD) oscillator has just turned up to a fresh outright go long signal.
In this weekly Japanese candlestick chart of VERU, below, we went back 10 years to show where prices have come from. Here we can see a large saucer bottom with prices starting to rally back in 2019.
There is an upside breakout to the $4-$5 area followed by a long correction back to the top of the base - classic. Strength above $10 - the highs of 2013 is very bullish.
In this daily Point and Figure chart of VERU, below, we can see a triple top breakout and a potential upside price target in the $17 area.
In this second Point and Figure chart of VERU, below, we used weekly price data. Here the software is projecting a price target of around $27.
Bottom line strategy: VERU has shot straight up so we need to see a period of sideways consolidation to correct a number of overbought conditions. Traders need to wait for this to develop before probing the long side. Risk to $9 for now (a bit much) and the $27 area is our longer-term price target.