It has been awhile since I talked about Filament Health and the psychedelics sector in general. In my last post, I left readers in suspense as I shared a technical structure indicating a possible reversal and bottom for the sector. Obviously this did not pan out. This is why it is important to wait for the breakout trigger before jumping in. These triggers were not met, and the psychedelics sector kept on heading lower.
In this article I will take another look at the psychedelics sector and why Filament Health technically looks like the best setup in the psychedelics space. But first, a quick refresher.
Filament Health Corp. operates as a natural psychedelic drug discovery and extraction technology company. It propagates psychedelic plants; conducts genetic research; performs extraction procedures; runs in-house trials; and distributes IP and drug candidates to drug developers, researchers, and other licensed parties.
It is all about patents. Check out our Investor Roundtable where Chris Parry explains the value of patents and Filament Health being the best positioned psychedelics company for the future.
Filament has developed innovative technology to extract and standardize stable doses of natural compounds from magic mushrooms. On August 3, 2021, Filament was issued the first-ever patent for the extraction and standardization of natural psilocybin, and since then the Company has been issued a further three patents. Two patents by CIPO and one by the United States Patent and Trademark Office.
Kieran Robertson reported on all the Filament Health news since I last covered the technicals.
Filament was issued a patent by the United States Patent and Trademark Office (USPTO) on April 13th 2022 for the extraction and standardization of natural psilocybin and associated psychedelic compounds. The patent covers essential technology for transforming variable psychedelic raw materials into pharmaceutical-grade, standardized drug candidates.
On April 19th 2022, Filament Health announced an exclusive licensing agreement with Psyence Group Inc. (PSYG.C). Under the terms of the agreement, the Company will license its proprietary botanical drug candidate PEX010 25 milligrams (mg) and the associated intellectual property (IP) to Psyence for use in its upcoming clinical trials.
On April 27th 2022, the company secured a fourth patent for the extraction and standardization of natural psilocybin and associated psychedelic compounds. The Company’s latest patent was issued by the Canadian Intellectual Property Office (CIPO).
“Adding a fourth patent to our portfolio demonstrates the calibre of Filament’s intellectual property strategy and drug development platform,” said Ryan Moss, Chief Science Officer at Filament Health. “Our ability to transform valuable natural substances into IP-protected pharmaceutical-grade drug candidates sets us apart as industry leaders.”
When it comes to the psychedelic sector, I have put up the ETFs PSIL and PSYK above. I have purposely left up the arrows. Those were indicating the price action I wanted to see on a potential reversal. It did not happen. Again, this is why we wait for those breakouts! A range after a long downtrend is not necessarily the signal that the downtrend is over. We can continue to make new lows as you can see from these ETFs.
Psychedelics are getting hammered, but keep in mind the overall stock market sell off. The fear is real. Money is running into cash and I don’t believe the overall stock market sell off is over.
Filament Health actually is showing signs of a confirmed bottom. The markets see $0.10 as the floor. We tested this in late February 2022 with buyers stepping in at $0.10 as evident by the wick. Note the price action from March 28th 2022- April 12th 2022. A range with $0.10 as the floor and $0.12 at the top. We respected the $0.10 level again, and the range saw a beautiful breakout.
We want strong price action when we break above a range. The candle on April 13th 2022 was very strong. A 45% green day on the news of a patent. Price even pulled back to retest near the breakout zone at $0.125 before continuing higher. Price even crossed over my moving average which is always a good sign. The uptrend looked like it was going to continue with a close above recent highs on May 6th 2022.
It seems that the broader stock market weakness and fear is not allowing the momentum to continue. The stock does look like it wants to pullback to retest the $0.12-$0.125 zone once again. We know that there is a big group of buyers at $0.10, and I do believe traders will be interested in picking up shares around the retest of support once again at $0.125.
Overall, the technicals look promising, and the fundamentals remain strong. Technically, the stock broke above a resistance zone and is looking to continue the uptrend. Fundamentally, management at Filament Health is getting things done. News is coming out consistently, and management is accomplishing what they set out to accomplish. Keep Filament Health at, or near, the top of your psychedelic watch list. The company will have a stellar 2022.