BSD Medical Corporation (BSDM)

At $1.00, BSDM is trading near the bottom of its 52-week range.  The chart is telling me that BSDM might be ripe for a rally (or possibly a full trend reversal).

I look at this penny stock’s chart and see several things that lead me to believe that.  So, let’s start with the chart!

I look at a company whose stock has been in a decline for several months, is hitting a 52-week low with a bearish MACD and oversold stochastics…and I think this is a good deal?  I must be out of my mind.

I’m not…despite rumours to the contrary.  BSDM is a financially strong company (more on that later) that, based upon chart alone, could be ready to rally.  I am looking at recent chart candles and am seeing the setup for a rally.  Take yesterday’s “Doji” for instance.

Stockcharts.com says that Doji’s are “After a decline, or long black candlestick, a doji signals that selling pressure is starting to diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched and a change in trend may be near. Doji alone are not enough to mark a reversal and further confirmation may be warranted.

I would expect to sellers to try and hit BSDM a few more times, but I think buyers will win the day.

BSDM also has a strong balance sheet going for it.  It has over $7 Million in cash, no debt and strong ratios.  The company can’t seem to turn the corner on profits recently, however.  The losses are not significant enough to cause any going concern issues.   This strong balance sheet gives BSDM time to “right the ship”.

I would not be surprised if BSDM didn’t get bought out.  I have nothing concrete about that….just a hunch.  Cash-rich, a smaller player in a larger market, mature products…etc, etc…

Have a great day in the market,

Jeffrey Dean, Editor

Here is what I am looking at for entry/exit points

Last Close:              $1.00

Buy Opinion:          $0.90 – $1.05

Short Term Sell:    $1.50

Long Term Sell:     $2.00+

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