Technical Communications Corporation (NASDAQ:TCCO) Bullish Break Out Looms Just As Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN)
Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) is once again exploding after a steep pullback from this year highs. Investors who missed the initial spike, but entered positions after a steep pullback, are already reaping big as the upside action continues to gather pace.
If you missed the second spike, you need not worry, as Technical Communications Corporation (NASDAQ:TCCO) is showing signs of following in Diffusion Pharmaceutical footsteps.
Technical Communications Price Analysis
After a 90% spike from this year lows, Technical Communications Corp has started pulling lower. In our view, the pullback, just as was the case with Diffusion Pharmaceuticals, is a minor correction pending further movements on the upside.
A meteoric rise to highs of $5.20 might as well have presented an opportunity for investors to take some profits thus the ongoing pullback. Technical Communications remains well positioned to deliver another leg higher once the pullback fades.
The ongoing pullback is staring at support at the $3.60 a share level. The stock finding support above the critical support level could as well open the door for the stock to spike higher back to this year highs.
Why Diffusion Pharmaceuticals Is Surging
Diffusion Pharmaceuticals is skyrocketing on the management reiterating they have sufficient cash for funding operations into July 2019. In addition, the stock’s market sentiments have received a boost on the Company confirming it is expecting additional cash to fund pivotal clinical trials.
The pharmaceutical company has already commenced Phase 2 clinical trial assessing TSC for the treatment of acute stroke in an ambulance setting. In addition, it is also conducting Phase 3 study INTACT, evaluating TSC viability in patients with inoperable Glioblastoma multiform commonly referred to as brain cancer.
Why Technical Communications Could Spike
Technical Communications is a potential breakout after the minor correction given its profitability metrics. For the 2018 fiscal year, the company generated a net profit of $228,000 or 0.12 a share an improvement from a net loss of -$518,000, marking a return to profitability. Revenue also increased to $1.7 million compared to $1.13 million reported in 2017.
A return to profitability came on the company completing deliveries of several foreign and domestic contracts as part of its DSP 9000/HSE 6000 radio encryption products. Technical Communications also continues to provide significant engineering services under contracts received.
Technical Communications also stands out in part because it offers high-end custom cryptographic services and solutions in established market niches. The Company’s custom TCC equipment and services continue to provide recurring revenue opportunities within established government systems product line.
The Company also boasts of a robust pipeline of contracts and initiatives development that could be a significant driver of the bottom line ideal for strengthening the stock’s market sentiment. The management is also working round the clock to reduce operating expenses as a way of propping the bottom line, in addition to investing in other business development efforts in pursuit of opportunities for growth.
While Technical Communication has pulled lower in recent weeks, there is no doubt that it is a potential bounce-back play after recovering from a harrowing plunge last year. A bounce back to profitability is one of the reasons why investors ought to be confident about the company’s long-term prospects.