In terms of biotechs, my members will know that yesterday I was predominantly focused on one stock.
Over the past two days, in the Biotech Breakouts Trade Plans and Video Recaps, I have spoken about my plan in AGEN and why I am long the stock.
This stock has a tremendous technical setup, in my opinion, and the company also has two upcoming catalysts.
All of which makes for a great case study and opportunity to learn.
Before I get into the juicy details, let’s first cover the basics.
AGEN, according to Yahoo, is a clinical-stage immuno-oncology company that discovers and develops immuno-oncology products in the United States and internationally.
Market Cap: 1.03B
Short Interest: 7.40%
Average Volume: 4.09M
Year to date, the stock is up 37.11%, and on the week is up 15.04%.
According to Finviz, the stock has an average target price of $9, set by analysts covering the stock, significantly higher than where the stock closed yesterday ($4.36).
Per Yahoo, the company will release its third-quarter 2021 financial results before the market opens on Tuesday, November 9, 2021. AGEN executives will host a conference call and webcast at 8.30 am ET the same day to discuss the results and provide a corporate update.
Per Biopharmcatalyst.com, the company will also present phase 1 clinical trial results at the Society for Immunotherapy of Cancer (SITC) on November 10-14, 2021.
So two critical upcoming catalysts might be having an immediate impact on the stock. As I have mentioned before, traders often anticipate the forthcoming news, and stocks might advance higher or lower before an important catalyst.
After the stock experienced a significant gap down last month, it spent a week recovering and going sideways. Often, after a significant move, a stock will spend time going sideways and digesting the move.
Two days ago, the stock broke out of the consolidation, confirming the bottom, and closed near the high of the day. Yesterday the stock had an inside day, which might have been the stock digesting the action from the day before.
From a technical standpoint, not only is this a reversal pattern, but it is also a consolidation breakout pattern.
In two stages, I bought the stock on Monday and have an average entry price of $4.36, indicated by the blue line above. My stop is currently around the $4.10 mark, indicated by the red line in the chart above.
My target for my long position is the gap fill. Specifically, to take profits, I am looking for the stock to bounce towards the $4.90 – $5 mark ahead of the upcoming catalysts.
I like how the stock has been trading recently. However, with important catalysts expected soon, I will not get married to this trade and idea. Remember, risk management is always the most important. So my stop is in, I have my targets, and I will not hold this position through the upcoming catalyst events.