China SXT Pharmaceuticals Inc (NASDAQ: SXTC) is flying in the market this morning, but with no news out, many are wondering why. Here’s what’s going on:
China SXT Pharmaceuticals Climbs in a Sympathy Play
As mentioned above, China SXT Pharmaceuticals is rocketing in the premarket hours this morning. Unfortunately, there haven’t been any press releases or SEC filings that outline a clear catalyst for the gains.
Nonetheless, the move seems to be a sympathy play.
Retail investors are jumping all over Chinese Pharmaceuticals stocks. It all started with China Pharma Holdings (NYSEAMERICAN: CPHI), a stock that gained in multiples after announcing its financial results for the full 2020 year.
The news sent investors looking for other Chinese pharmaceuticals, and SXTC stock isn’t the only one investors have latched onto. For example, Universe Pharmaceuticals, yet another Chinese Pharma play, is gaining in multiples as well.
The Stock Could Go Much Higher
Not only are investors piling into China SXT Pharmaceuticals, the stock is one that trades with a pretty low float, with just about 22 million shares available. As the law of supply and demand suggests, when something is in short supply, and demand is high, prices must climb upward.
Considering the mounting demand, and the fact that the stock trades with a pretty small public float, we could just be seeing the tip of the iceberg here.
The bottom line here is simple. China SXT Pharmaceuticals is enjoying a sympathy play that’s sending Chinese biotechs through the roof this morning. With a low float, there could be much more room ahead, making the stock one to watch closely.