Midatech Pharma PLC-ADR (NASDAQ: MTP) is having a horrible day in the market today, falling deep into the red. With no news out, many are wondering why the stock is tumbling. We believe that we know the reason. Today, we’ll talk about:
- Why MTP stock is tumbling down;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why MTP Stock Is Tumbling
As mentioned above, Midatech Pharma is having a horrible day in the market today, tumbling deep into the red with no news out. So, what’s the deal? Well, we have to look back a bit.
Over the past couple of trading sessions, MTP has seen incredibly strong gains. These gains have been fueled by the surfacing of a document showing that an agreement with China Health Systems has been finalized.
Th agreement brings the company’s products and technologies to the vast Chinese market. Moreover, it leads to a pretty strong equity investment.
Following the finalization of the agreement, the stock saw tremendous gains, gaining in multiples one of the days and following up with yet another strong performance. However, today, it’s down.
The truth of the matter is that there is no news and no catalyst for the declins. However, when we see such incredible gains over a short period of time, technical triggers start to hit and traders start to take their profits.
While today’s drop in the value of MTP is a painful one, it looks to be nothing more than profit taking along the line due to the incredible rate at which the stock grew over the past couple of sessions.
What We’re Seeing From the Stock
One o the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Midatech Pharma, recent news proved to be overwhelmingly positive. This led to a fast-paced rise for the top over recent sessions.
Today, the stock is starting to correct as profit-takers hit the ticker hard. As is just about always the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (11:12), MTP is trading at $0.57 per share after a loss off $0.22 per share or 28.22% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on MTP. In particular, we’re interested in following the story surrounding the company’s continued work to bring its products and technologies to markets arond the world. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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