Wednesday, November 5, 2014

TransEnterix May Bust A Move With Upcoming Earnings

TransEnterix has been consolidating for more than six months, and the stock looks like it may bust a move with earnings being announced tomorrow morning. Shares are at the end of the consolidating triangle pattern highlighted below and earnings may act as a catalyst to break the stock out of its consolidation pattern.

Also, notice the accumulation/distribution in the chart below, which signals that there has been heavy accumulation on a few high volume days followed by low volume days and limited selling.

Earnings tomorrow morning won't be about the numbers, as the company is still awaiting FDA 510k approval for the SurgiBot. Earnings tomorrow will be about updates to the current timeline of commercialization for the SurgiBot and any details surrounding the roll-out of the device. Any revelation of what TransEnterix plans to do with SafeStitch Medical's assets (GERD procedure), which they have sidelined, can also act as a positive catalyst tomorrow if they are looking to sell it.

The charts above illustrate that a break out of the triangle is imminent, whether it's up or down will likely be based upon tomorrow mornings earnings conference call.

**I am invested in TransEnterix and have a long bias in the name. This is all my opinion and nothing else.