AUTHOR: TRADE IN MEXICO
Mela Sciences, Inc. is another medical device company that has developed a product called MelaFind, which helps dermatologists to detect melanoma (skin cancers). It took many years and millions of dollars to develop this product, which not long ago received It has also been granted CE Mark approval for the sale of MelaFind in the European Union. These approvals could be key to driving major revenue for this little-known company and that along with the end of seasonal tax-loss selling could be what is fueling signs of a recent momentum shift in the stock.
MELA shares were trading around $3 in November, but the shares appear to have been impacted by tax-loss selling in late December. However, the stock has started to rebound from recent lows on much higher than average volume. According to Yahoo Finance, MELA shares have an average daily volume of about 217,000 shares (for the last three months). However, in the past couple of days, the volume has jumped to well over 1 million shares and the stock has bounced off recent lows. This could be signaling a coming rebound in the share price.
I recently about the takeover potential this stock might have as well as the possibility for a short-squeeze, as well as the fact that MelaFind was selected as a top innovation for 2013 by the Cleveland Clinic, and the potential risks. Another published (on January 8, 2013) by Stockpickr.com, highlighted the recent volume increase in MELA shares, and said that this oversold stock could be poised to technically breakout to the upside. It stated: "If that breakout triggers soon, then MELA will set up to re-test or possibly take out its next major overhead resistance levels at $2.25 to its 50-day moving average at $2.33. Any move above $2.33 would then put $2.50 into focus for shares of MELA."
Based on this, MELA shares appear undervalued and poised for a rebound rally from a technical and fundamental point of view. Longer-term, the shares have even more upside as analysts at WBB Securities rate the shares as a "speculative buy" and set a It's also worth noting that Mela Sciences will be presenting at the upcoming on January 16, and that presentation could provide additional insight into strategic plans for this company in 2013.
Key Data Points For Mela Sciences From Yahoo Finance:
Current Share Price: $1.85
52-Week Range: $1.65 to $5.13
Dividend: none
Data sourced from Yahoo Finance. No guarantees or representations are made.
Disclaimer: Please consult a financial advisor before making investments.
