Innovation Pharmaceuticals Inc (IPIX)

[TOB]

I can see the attraction of shorting penny stock rallies, most do decline, most penny stocks are garbage with high floats and owner management that issue shares to pay their own salaries.

Bio-techs are more sincere, but I agree many suffer high dilution at early research and initial clinical trial stages, and many flop and fail to bring a drug to market.

But CTIX is an exception to this rule. For one, it has very high insider ownership, rather than selling shares to finance themselves, the owners are financing the shareholders. In fact, Management insiders own 72.41% of CTIX, so their interest are closely aligned with CTIX shareholders as they are the largest CTIX shareholders.

Further, CTIX is in a long-term up trend which has dominated this year. In prior years, $1 resistance was always a good place to sell or go short, but now CTIX has seen the $1 resistance change to support.

Yes, this $1 line has flip-flopped a couple times between resistance and support, and we see a pattern of returning to the 50 day MA after rallies, but this is a pattern of a series of higher lows, which equals an uptrend.

For this reason I personally favour buying dips, or even break-outs with CTIX. Yes, it is OK to take profits at rallies and buy back at dips, but this is a scalping game for the nimble and experienced. We are indeed at a logical place to expect a small decline. No doubt this same scalping can be done with shorting shares, but the risk is much higher.

Short selling CTIX also has a very bad reward to risk ratio. Unlimited upside risk, and limited down-side profit. But best of luck to all. IMO short sellers help longs in any up-trend by providing liquidity and holding back bubble rallies. So longs get in at more reasonable prices.

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