Pulling once again from Edwin Dorsey’s [free] Substack newsletter, The Bear Cave, here are more issues worth a shorting glance. His publication makes a good watchlist.
First is RKLY, about which Dorsey wrote on April 24:
Iceberg Research published on Rockley Photonics Holdings, a UK-based startup that is developing biosensors for smartwatches and medical devices. Iceberg wrote that “the company is experiencing technological roadblocks and will soon face a cash crunch and heavy dilution.”
Iceberg highlighted long delays by Apple in rolling out similar biosensor technology and cited that a major joint venture partner of Rockley, Hengtong Optic-Electric, was recently sanctioned by the U.S. Department of Commerce. In addition, Rockley signed a “vulture financing” deal with Lincoln Park Capital because of a nearly 50% redemption rate in its SPAC closing process. Rockley is down ~75% since its August 2021 IPO.
Oh, goody. Earnings are April 27. Here’s the daily chart.
Next is BKCC, with this short note from Dorsey on April 22:
CFO of Blackrock Capital Investment Corp resigned after one and a half years. The company has had four different CEOs and four different CFOs in the last ten years.
Right now, the upside is winning on the monthly chart below. Price is headed back toward the bottom of the channel from 2007, while resting on support of the top of the Cloud, above both downtrend lines from 2016, and above the dotted pink trendline. It’s near term direction will be given with the monthly close next week.
Earnings are May 2. Here’s the daily chart. If price falls below the purple trendlines and then below the Ichimoku Cloud [green and red horizontals], that sets up an enticing short.
On Feb 6, 2022, The Bear Cave wrote the following about MP:
Bonitas Research published on MP Materials, a Nevada-based rare metals mining company. Bonitas Research alleged that a related-party China-based customer, Shenghe, “overpaid for MP concentrates to artificially inflate MP’s profits.” MP insiders have sold over $400 million in shares and Shenge benefits because it was awarded $55 million in company stock.
Bonitas concluded, “If MP was to sell either MP concentrates or MP oxides to independent 3rd parties, we expect MP’s profits to plummet because MP’s ore content is too expensive to process. We are short MP and think that its stock is going lower.”
The company is up about 260% since its November 2020 SPAC merger.
Finalizing next week, the monthly chart is important.
A bounce may happen, but I doubt that would move price into, let alone, above, the Cloud [green and red horizontals]. Here’s the daily version. Earnings are May 5.
