The set-up: Catalyst Biosciences Inc. is a clinical-stage biopharmaceutical company that is developing novel medicines to address serious medical conditions. They just had a news release about achieving “Stable Normal Factor IX Blood Levels in a Preclinical Subcutaneous Dosing Model.”
I’m not going to lie and tell you that I understand what that news really means for the company or the development of its products long-term, but I can tell you that good news pre-market got me to look at the chart.
I’ve traded CBIO a bunch of times recently, so I am confident in what I see on the chart, and it looks like a very favorable end-of-consolidation pattern.
The plan: When you see news combined with a potential end of consolidation move – particularly on a stock chart you know well – look for an entry point. You’ve got a stock to play.
The play: Technically, a break over $4.70 could turn into a short-term play all the way up to $5.25, the previous high.
I’ll be looking for the stock to hold over $4.50, which is the 50-day moving average, for support.
The stock is already trading over $4.70 Pre-market today – after the news was released – If it holds there at the open, I’ll be looking to buy in, and will look to take profits in the $5 to $5.25 range.
Jeff Williams is the lead trader of PennyPro.com. He is a short-term trader of stocks under $10 a share. At the time this article was published on RagingBull.com, he had no open positions, options or orders in CBIO, but was planning to trade the stock as described in the article. He last traded CBIO on June 12, buying in at $4.57 and exiting the trade at $4.62.