I have little doubt that what I'm about to say could inflame some fans and followers of Atossa Genetics Inc. (NASDAQ:ATOS). But, I wouldn't be doing my job if I didn't call 'em like I see 'em. So, here goes. ATOS is on the verge of a substantial meltdown. It's possible the stock could circumvent this pullback, but the odds don't favor it.
If you've never heard of Atossa Genetics, don't sweat it - you're not alone. The $63 million company only went public in November of last year. The stock got off to a surprisingly good start following its launch, moving from an initial price of $4.55 to a peak of $12.40 by March. But, that's when the usual post-IPO tendency started to kick in, pulling ATOS back the $4.00/$5.00 range, where the bleeding apparently stopped.
As veteran IPO investors can attest, though, it's unusual for a new stock to not dip deep into the red ink within the first twelve months of being issued, which means ATOS is near overdue for a sizeable move lower. And, the shape of the chart says that dip from Atossa Genetics may be just around the corner if the bears can just take one more poke.
The good news is, a support line has developed at $4.29. That's close to where ATOS found a bottom in early June, and then again in early August, and then once again in mid-August.
That's bullish, on the surface, but in this case, may not mean much. While Atossa Genetics may have a horizontal support level in place, you can also see the stock's being pushed lower by the 20-day moving average line. The support and resistance lines are on a collision course too, and soon - very soon - something will have to give. Given the broad picture, it's apt to be the floor that buckles, which will jump-start a wave of pent-up selling pressure.
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Yes, it's possible ATOS could push its way above the 20-day moving average line and all this pent-up energy could turn into bullishness instead. It's just the less likely of the two outcomes, however. After three quarters of the scrutiny that only being publicly-traded can bring, the natives are getting restless. The company's revenue growth still only meant $330,000 in sales last quarter, and for every step forward the company makes on the revenue front, the already-sizeable quarterly loss gets exponentially bigger. The odds of the usual post-IPO "right-pricing" are growing. One nudge under the $4.29 mark could start the avalanche.
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