Motif Bio: Gap higher after extended base targets as high as 60p

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Motif Bio: Gap higher after extended base targets as high as 60p

It should have been the case that investors in the area of antibiotics development had a smooth ride on the share price front, given the necessity of developing new drugs in this area. The reality has been rather more challenging so far.

Clearly, one of the issues when investing in the world of biotech in general, and new antibiotics in particular, is that there is not necessarily an easy path towards the chosen destination. There can be stumbling blocks on both a financial and fundamental level.

In the case of Motif Bio (LON:MTFB) however, the latest positive Phase 3 trial results suggest that backers of this situation have reached the light at the end of a rather long tunnel. The positives centre on the Iclaprim drug, something which explains why the stock has gapped higher today.

Hope from a technical perspective stems from the way there has been an extended base in place on the daily chart since as long ago as December. Since then the shares have twisted around the 50 day moving average at 25.76p currently, with the message being that at least while there is no break back below this feature one would be reasonably confident of positive momentum in the wake of today’s push higher.

Indeed, it could very well be that as little as a weekly close this Friday or next could be enough to accelerate the stock towards its theoretical 2-3 month destination. This would be at the top of a rising trend channel which can be drawn in from as long ago as September last year, and heading for 60p.

mtfb chart

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