For those of you who don't know how to read these charts I will explain. I will also explain why I like NOVN and expect a spike soon.

https://preview.redd.it/br3062go2n151.png?width=1920&format=png&auto=webp&s=a195fd9d69b9e0f9c929949fa35a167a767c56ec

So this is the daily chart for the last year for NOVN. What you need to look at are the SMA's. SMA stands for Simple Moving Average which isn't more than an average price over a given time period. In this case there are SMA 50, 200, and 20 day lines.

When a stock has been on a major decline, which essentially all penny stocks are, the short term SMA can cross a longer above a term SMA which will very commonly lead to a spike. It is also known as a golden cross, an incredibly bullish pattern.

For example look in December. The SMA 20 (light purple line) crossed above the SMA 50 (darker orange line) and you can see how much the price jumped.

Why there wasn't a spike in September when they crossed:

Novan was awarded a 1.1 million dollar grant from the department of defense, which kind of came out of nowhere, so there wasn't exactly a consolidation phase. The price jumped before the stock evened out which is the consolidation phase. Below is the link.

https://www.globenewswire.com/news-release/2019/09/20/1918518/0/en/Novan-Awarded-Approximately-1-1-Million-Grant-by-Department-of-Defense.html

https://preview.redd.it/qo1h7r7q2n151.png?width=1920&format=png&auto=webp&s=cc0d4d093f9b7f37e70c27b5e747708f9e4eb63e

Here's why I think it will spike:

This stock has held it's position of around 40 cents incredibly strong for a while now. If that SMA 20 can cross over the SMA 50, this will very likely spike for reasons I explained above in terms of the chart.

In terms of the company, they have formulated a plan for covid-19. Link below to the whole presentation:

https://novan.gcs-web.com/static-files/9ca720e1-7cdb-4904-aa92-9c37c5388cb1

https://preview.redd.it/atvcxae59n151.png?width=1920&format=png&auto=webp&s=9ede4b25932c8c78c68144e470e10b8ec1d297fd

What you need to know from that slide are really two things. One- Nitric Oxide has the ability to stop reproduction of viruses in the Coronavirus sector. Novan has great technology for NO. Two- the company is also looking for grants. That is exactly what happened in September and you can see how much they spiked when that happened.

submitted by /u/Kyletrammell
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