It may not be as big as NuVasive, Inc. (NASDAQ:NUVA), and it might not be as sexy as MiMedx Group Inc. (NASDAQ:MDXG). But, Bacterin International Holdings Inc. (NYSEMKT:BONE) offers something to investors that MDXG and NUVA don't - can't - right now... a distinct opportunity for a lot of upside in a short amount of time.
For those not familiar with the company, Bacterin International Holdings is predominantly a tissue bank for allograft procedures. Though it's not necessarily its focal point, yesterday's announcement from BONE that it was launching a new allograft product for spinal applications underscores how it competes almost head-on with the aforementioned NuVasive (which is primarily a spinal allograft player) as much as it competes with MiMedx Group, which is more of a generalist, though an impressive generalist.
How well Bacterin International Holdings stacks up against NuVasive, Inc. or MiMedx Group Inc. isn't the important part of the story right now, however. No, the important part of the story here is how the shape of the BONE chart today suggests Bacterin shares have wiggled their way into a full-on breakout mode.
The daily chart of BONE lets us see how the stock finally popped above a major ceiling at $0.80 today. It had bumped into that line - give or take - four different times since August, but had never been able to move above it. As of today (Wednesday), however, the bulls finally shoved it past that resistance. Now that it's out of the way - especially now that all of the key moving average lines have crossed one another in a bullish direction - the stock should be able to move higher much more freely.
To really put the turnaround from Bacterin International Holdings in perspective, however, you have to take a step back and look at a weekly chart of BONE. It's here we can see just how big of a deal it is that the stock managed to move above the 200-day moving average line (green) earlier in the year, after being unable to do so for the better part of 2012 and all of 2013 despite several attempts during that time. This really is a paradigm shift, complete with a higher low and as of today, a higher high.
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With all of that being said, know that the company is set to release last quarter's earnings results after the close today. That will be a catalyst, for better or worse, and it may well be the prod for the sudden strength we're seeing from Bacterin International Holdings Inc. today. What does a trader do about it? At this point, the smart move may be doing nothing until the dust settles after earnings.
The market has already spoken, pre-earnings. If earnings are seen as poor that could hit the stock, but the undertow has already been revealed as bullish. If instead the market likes what it hears from Bacterin after the close today and bids it up, that may well drive BONE into an overbought condition it's going to have to burn off anyway... with a pullback. Either way, newcomers should wait, and either way, the bigger trend has already been confirmed as a bullish one. The only real challenge from here is timing the entry.
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