CTI BioPharma Corp (NASDAQ:CTIC) stock price has been badly hurt by the result of the fourth quarter and the full year ending at 2014, 31st December. Particularly the EPS reported at a loss of $0.27 was much lower than the market expectation of a net profit of $0.18. The fourth quarter in 2013 showed a net profit of $10.2 million. Coming to the full year of 2014, the net loss came to $0.65 per share against a loss of $0.43 in 2013. The margins of loss clearly show the disappointment the market felt, resulting in a vertical drop in the stock price, losing 25% in just a single week.
Have analyst identified a strong buy signal for CTIC?
Just before the result, the stock had seen some gain as CTI BioPharma Corp (NASDAQ:CTIC) had informed that a study evaluating its candidate Pacritinib, a JAK2 inhibitor, met its primary endpoint in phase 3 trials with positive top-line results. The excitement over this piece of news is quickly fading out now as the street realizes that unless the company delivers a positive result of its second phase 3 trial, no sustainable gains can be expected.
Technically, the last week’s price action has obviously weakened the structure with the sharp cut of 25%. While the volume has spiked up as usual in a selloff, the trendline resistances shown on the chart, make the weakness look like a foregone conclusion.
Using the log scale to clearly identify the lower levels, the major supply area around $5 can be easily marked. The price structure in the last few years looks similar to a bullish Cup & Handle pattern but the handle is too long for a powerful pattern and the trendline resistance is yet to be broken above. Investors may avoid any bottom fishing here and search for better opportunities elsewhere.