Yesterday was a somewhat mixed day in the market and a continuation of the indecision and chop that I have noticed this week.
Through it all, one stock stood out to me yesterday with its impressive, unusual volume and performance.
Look at the Finviz top gainer’s list from yesterday, and you will know what stock I am talking about.
For the most part, this stock quietly went about its business yesterday and did not steal the attention away from another low-priced, in-play name (CEI).
Without the imagination and interest of the retail crowd and attention from them across the many social media platforms, this low-priced stock could still close green after trading enormous volume.
The stock traded over 103m shares. Compare that figure with the stock’s average volume of just 1.72m, and you will begin to see why I am impressed! LPTX closed the day up 31.09%.
Before I look at yesterday’s action and what could be next for the stock, let’s better understand the stock and where it has come from.
What is LPTX?
Leap Therapeutics is a biopharmaceutical company. The company, according to Yahoo, acquires and develops therapies for the treatment of cancer. The company was formerly known as HealthCare Pharmaceuticals and changed its name to Leap in November 2015. It is based in Cambridge, Massachusetts.
Key Stats, per Finviz:
Market Cap: 155.09M
Short Interest: 5.20%
Average Volume: 1.72M
What was the catalyst?
Unlike some low-priced stocks moving lately, Leap had a catalyst that caused the share price increase.
Yesterday, the company announced a presentation of updated positive data and results for its DKN-01 plus Tislelizumab. According to the presentation, the results showed compelling activity in first-line patients with gastric, gastroesophageal junction cancer.
As I mentioned above, this press release resulted in the stock closing up over 30% and trading huge volume. On the week, the stock is up 68.67% and 12.44% year to date.
The news also resulted in a significant technical breakout. The stock broke away from a major downtrend, signaling a momentum shift and character change in the name.
On a higher time frame, the support of the downtrend is $1.70, and the nearest resistance from the daily chart would be $2.80 and $3.
Key levels from yesterday
From yesterday’s intraday action, I have identified four key levels of interest from now on. Pre-market support and support early on in the day was between $2.20 and $2.30.
Resistance in the afternoon occurred between $2.70 and $2.80.
From the pre-market, resistance was $3 and $3.17, which was the pre-market high.
The game plan
With the above vital levels and information in mind, now my job has become reactive.
For example, if the stock can hold above the resistance from yesterday afternoon and trade large volume, it could signal a good long entry. If that were to materialize, the first target would be $3, and the second would be $3.17.
On the flip side, though, If the stock were to trade below significant support, then I would be hands-off on the long. It might signal that the stock needs time to digest the gap up and yesterday’s action. It could also signal that the sellers outweigh the demand for the time being.
Above the 52w high of $3.24, there is no significant resistance until the high single digits, which the bulls will be thinking about.