Will this stock keep going higher?

What's up everyone? All right, so in today's episode we're going to talk about CODX, Co-Diagnostics. This is a US biotech company and this stock is up over 1,000% in 4 days. It just keeps moving higher. But I think that this is a stock where there's an interesting story here because it's a it's a typical biotech company in the sense that it's a company that runs at a loss. They don't make money. If we look at their filings and I pull I usually use BAM SEC to pull up filings cuz it's a little bit easier to use this it searches the Edgar SEC database but it organizes the filings in a way that it's easier to read. And you can use it for free. But anyway, so if we look at their um if we look at their revenue the revenue that they have is is very very limited. It's almost nothing. Um and then the operating expenses they're operating at a loss in the first 3 months of 2026 of 9.2 million dollars. In 3 months. So we're looking at a company that does have assets but they spend a lot of money. And this is typical. They're doing research and development. They're trying to develop new drugs, new, you know, medical devices, all this kind of stuff. And if they're successful, then all of that money will have been well spent and all the shareholders will get I suppose compensated by the fact the company will either make money on this new thing that they've created or be able to sell it, you know, maybe to a bigger biotech company. So when we look at the stock, the catalyst that began all of this momentum was back on Tuesday of last week. And the catalyst was that they raised $3 million. And you might think that that's kind of a funny catalyst. They raised They you know, they raised $3 million, but they didn't raise it with like, you know, GoFundMe. They raised it by selling shares to an institutional investor. So, in other words, they printed more shares. They got money for it, but when they print more shares, that hurts all the existing shareholders cuz it dilutes their percentage ownership of the company, right? Now, people shouldn't be surprised when this happens. In fact, you can't claim to be surprised because this is a company that actually has an active shelf registration. The S-3 is a shelf registration, which gives this company the right to sell shares at any time. They have a shelf registration to raise $150 million. And so, they can tap that shelf from time to time to sell shares to raise money. So, they did that last week. They did that to raise $3 million. And $3 million really isn't all that much money, to be honest, considering how much they're spending. They're going to need to raise a lot more than that, but in any case, they sold 1.6 million shares, plus they sold warrants, which gave that person the right to purchase more shares. And then they have the effective offering price for the common stock and the warrants to be issued at $1.81. And the warrants have an exercise price of $1.51. Now, to just briefly explain the way the warrants work, the warrants give this person the right to buy shares at $1.57, but they're not obligated to. So, if they want to later, they can. So, in what scenario would they go ahead and buy those shares? If the stock is trading at anything well above $1.57. If it was trading below a dollar 57, you would not exercise those warrants. It would be pointless. But if it's trading above it, like $2, uh you'd make 47 40 or 43 cents a share. If it's trading at 250, $3, $4, $5, then you're starting to make more money. So, this institutional investor has 1.6 million shares that they just got. And they've got another 1.6 million roughly that they could buy at a dollar and 57 cents. So, that's the catalyst. Why the stock go up on that catalyst? It goes up on that catalyst because you have an institutional investor who likes the stock enough to write a check for $3 million. And we expect an institutional investor does a degree of due diligence that's certainly deeper than uh what an ordinary investor might do. So, it's a little bit of a vote of confidence. And in a way, it puts in a bit of a floor on the price of the stock at that time because now you're like, "Okay, this person values, you know, the company this highly." Now, we also have the reality that the float is 3.4 million shares. You've got a market cap of $18 million right now. And so, you know, it's it's a fairly small company, but this person was willing to put in $3 million. And so, the market usually responds well to private placements. The market doesn't respond well when the company's dump shares directly on the open market to the traders buying and selling every day. That is kind of a last resort for a company to do because when they dump those shares on the open market, it suppresses the price because they're creating essentially an artificial um degree of supply. So, they're creating more supply, which offsets the demand, and the price goes down. Uh and if they could find an institutional investor just write them a check for three or four or five or $50 million, dollars, whatever it might be, that's a much better way to raise money. Uh so, those that's just to differentiate those two types of um offerings. One is a private placement, the other's a direct offering. So, this ends up squeezing up here, and over the last few days I've watched it move higher, and I've said, "You know, CODX is a tricky stock. It's a tricky stock to trade, and I've you know, having been in the market for as long as I've been in the market, you know, I I'm I'm very familiar with this stock. Look at all the times that it's popped up. It pops up, but then you look at the chart, big picture, and what does it do? It pops up, and then it sells off. It pops up, and then it sells off. So, it has a pretty well-established history at this point of selling off after it pops up. And because it started at a little bit of a lower price on this last move, you do have a lot of big buyers and big sellers, because they got in early, and they were swinging for the fences. Uh but now today, the stock broke over the 200 moving average. So, the 200 EMA is a significant line in the sand. The last time that happened, the last two times, we did end up getting a bigger squeeze. This was a really big squeeze, but remember, the prices on this aren't correct because the stock had done a reverse split here 30 to 1. So, it was 1/30 of the prices it shows. In any case, so now we're getting this rally up, but we also have an interesting divergence. High volume initially, declining volume as the price moves higher. But, think about it this way. Down here, the stock was $2 a share. Up here, it's at $8 a share. So, it's four times the price, so you would expect the volume would be a little bit lighter in total shares traded. If you looked at the total amount of money traded, it would not be quite a steep drop-off because we are having more money being traded at these higher prices. Nonetheless, the volume is a little bit lighter today than on the previous days, which is not something I really love. There's also an interesting pattern here. High volume, light volume, high volume, light volume. This This is a little I I don't really like seeing that pattern. So, when I saw CODX this morning, my initial feeling was, you know, I've seen it before. This is a company that has just done a private placement, but it's continuing to move higher. And I think there's a really high likelihood that they're going to sell more shares into this move. And I'm not certain of that. You know, it's It is moving higher. It's up 70% today. You know, now 1,000% in 4 days. But I worry about that. And so, I didn't feel comfortable taking any trades on it during the pre-market session. And so, as a result, I I did not. I didn't want to take a loss. I wanted to manage my risk in a smart way. And so, I didn't take any trades on it. You can see how it popped up, dipped down, popped up, dipped down. And then this sort of inverted cup and inverted head and shoulders. Then it comes back up, dips back down. And then we get this rally a little bit after, you know, the sort of in in the the later part of the morning. And in this area here, it's now becoming rather thickly traded. And so, you've got this tug of war, where you've got big buyers, big sellers. And although you have these bursts of momentum, and it then stalls out. A burst of momentum and then it stalls out. And these bursts are short-lived. So, while I think that if it keeps holding these levels, people who are maybe shorting against the 200 moving average could get squeezed out. I also think that because the company has a shelf registration, which for what it's worth, most companies, even large companies, have shelf registrations. Gives them the right to sell shares at times that they want to. Which is sometimes sometimes in the best interest of the company. So, you wouldn't want to avoid, in my opinion, trading any stock that has a shelf registration. But this stock has a shelf registration. They are losing money. They They have a history of raising money through these offerings. This seems like a higher risk place to be trading it. And then, at the end of the day, price action is number one. So, you could have a company that has a shelf, has a high risk of doing an offering, and the stock just keeps pushing higher. And so then, we attribute that to maybe there's a big short seller out there that's getting squeezed. That's been banking on the offering and it's not coming. And as the price moves higher, they are getting forced to cover. And momentum traders are jumping in. So, when you look at the fundamentals of these companies, they might support a short position because of the things that we just mentioned. But, the technicals don't support going short because the price is continuing to surge higher. For me, the technicals also don't support being long because in the way it's trading, it's very heavy. You've got a lot of sellers. It feels like tug-of-war, and it doesn't feel like the type of breakout stock that I would do well on. So, I find this to be interesting when we have stocks like this because sometimes I'll get frustrated that they're continuing to move higher. I never really felt comfortable with it. And then finally, I say, "You know what? I'm just going to slam an order here on this at the high of the day, 9.25." And sure enough, whenever I do that, I feel like I'm capitulating. I'm buying right into the top. There's almost always a big seller. It drops 50 cents a share, and I take a big loss, and I walk away, you know, with my tail between my legs feeling defeated. And I'm going to resist the urge to do that here today. So, where I sit today in my trading is that today, Monday or Tuesday, is a no trade day. Uh CODX, it's up 80% 31 million shares of volume. I didn't touch it. I'm not going to capitulate. I'm not going to touch it. It is what it is. We had some stocks earlier this morning, Y map, um U Z K, P H G E, Q T E X. These are all cheaper. Didn't want to trade them. They're too cheap. M N T S, interesting, moved higher, no news. This one is trying to piggyback a little bit on the SpaceX IPO. They do work with SpaceX, but this was not able to really sustain these levels during the pre-market session. It was grinding, dropped down, and then it squeezes a little bit after the bell, and then comes all the way back down to 12. So, I would say today, you know, I think I did the right thing by sitting on the sidelines. I'm taking the approach of trading less, but when I see something I like, I'm taking more risk and I'm being more aggressive, and that's making up for the no trade days. So, I'm currently sitting up $95,000 on the month of May, which is great. It's a solid month, I mean, all things considered. And we still have, well, four, now three days left in the month. So, we'll see if I get one more really solid trade this week. I hope we do. Uh it would improve the month certainly if we could get that, but at the end of the day, you know, whether this month finishes at 100 or 150 or whatever isn't going to make a big difference. Big picture, it's about coming in every day, sitting down, and having the discipline to follow your rules and not to get tempted into jumping in things that really aren't that strong or just don't feel like you can manage your risk on them. So, with that, um I'm also going to give you guys a reminder that tomorrow is the last day of our Memorial Day sale. So, if you haven't already checked out the Memorial Day sale, I'll put a link in the description and I'll also pin it to the top comment, so you can check it out if you're interested in becoming a member at Warrior Trading. Now, with that, I'll remind you as always that trading is risky. My results aren't typical and there's no guarantee you'll find success whether you trade with me or you learn on your own. So, manage your risk, take it slow and always practice in a simulator before putting real money on the line. And if you want to watch more of um me talk about the SpaceX IPO, I'll put a link to that video right here. It's been pretty popular and I have some strong opinions about what I think is going to happen during that IPO. All right, with that, I'll see you guys first thing tomorrow morning.