If you like tennis, you’re going to love Applied DNA Sciences’ (APDN) action recently…. lots of back and forth, with each ebb and flow being trade-worthy. Following today’s announcement that a patent application had been filed, it looks like the stock is gearing up for its third big rally since February.

The hint is simply strength. The penny stock’s up 13% today, and is up 43% from the low point (8 cents) following the prior surge to a peak of 17 cents. Both of the big rallies we’ve witnessed in recent months started out as small rallies, largely inspired by the news. This one isn’t likely to be different. (see chart below)

As for how for this penny stock might fly this trip, it’s tough to say. Shares quadrupled in the February bump (from high to low), and the stock quadrupled again between its March low and April peak. If the pattern stays true and APDN once again quadruples the previous low of 8 cents, we’re talking about a move to 32 cents. However, that may be a little lofty…. it’s easier to rally from 3 cents to 12 cents than it is to rally from 8 cents to 32 cents.

On the other hand, we think the ingredients are right for another big push higher. After all, APDN is clearly making higher highs and higher lows now.

Realistically, a move to 22 cents this time around would be a good goal. That’s been resistance for this chart before. Then again, so has 17 cents, so keep your guard up if we start to get traction. And as always, apply defensive stops if you’re trading penny stocks like this one.

By the way, we’re seeing some of the strongest volume we’ve ever seen from Applied DNA’s buyers. They got a little overzealous in April, but the interest is certainly there. That’s a strong hint that ebb and flow will stay net bullish.

And the reason for today’s push? The company filed a patent on the combination of SigNature DNA and Cyanoacrolyte. Yes, it’s good news in a way, though the market may be getting jazzed without even really knowing why.

A patent application doesn’t mean a patent has been granted. And even if one is granted, it could be months before it’s awarded. Even then, owning a patent doesn’t generate revenue - the company still has to go out there and sell the product. So, for you fundamental investors out there looking for the ‘aha’ catalyst that will unlock the stock’s true value, this isn’t it. It’s a start, but the finish line is still miles away.

Traders, however, are enjoying the ride in the meantime.

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