Happy Wednesday to you all! A reminder that the markets will be closed on Friday in observance of Christmas.
Yesterday morning I wrote about my favorite setup for the day and provided a detailed explanation and game plan.
The stock pulled back and made a higher low in the low $0.20s before trading towards my planned target area of mid to high $0.20s.
I’ll review and provide a more detailed overview and follow on for AABB in the near future, gang, but for now, I want to go over a new game plan for a biotech stock that I have traded before.
However, the difference is that I am not looking for an immediate entry. Instead, I am looking for the stock to shape up in the coming weeks and meet my conditions for entry.
Progenity, Inc. (PROG)
PROG, according to Yahoo, is a biotechnology company that develops and commercializes molecular testing products in the United States.
The stock is down 54.24% year to date and 69% off the 52w high. PROG had an impressive run beginning early October and saw a sharp increase in volume, sustained for over a month.
PROG broke out of a tight consolidation on the daily chart and consistently made higher highs and higher lows, all the way from the breakout over $1 to the 52w high of $6.20.
The stock had fantastic momentum and presented brilliant trade opportunities during that period.
I got familiar with the stock and its personality during that period and traded it successfully. Here’s a look back at how I went 3-for-3 in the stock.
- December 20, 2021, completes exit from laboratory business with the sale of affiliate lab.
Key Stats, per Yahoo:
Market Cap: 402M
Short Interest: 14.32%
In the coming weeks, I will be keeping tabs on the stock and looking for a few conditions to be met before I consider going long.
Firstly, I would like the price action to firm up.
Currently, the stock is beginning to firm up and base over $2. However, the price remains below critical MAs.
I would like to see the stock continue to hold over $2 and then proceed to base over 200d and 20d MA.
I like how the critical MAs are converging and tightening near the current share price.
I would like the volume to break out of the past month’s range to think about a possible entry.
If the stock can break out of the daily consolidation and confirm a higher low on the daily chart with an increase in volume, I might look to get long with a stop placed near $2 or the low of the consolidation.
As of right now, I would be targeting $3.50 – $4 as that is a previous area of resistance.