06/06/2022
Are small cap biotechs ready to run?
In the rare case that I buy and hold a more speculative biotech stock, I look for clues ahead of time… clues that signal an imminent wave of parabolic runners.
It’s risky playing pennies…
(Source: tenor.com)
But in the last month or so, they’ve started picking up.
One that’s been up and down with an incredibly wide range is SIGA Technologies, Inc. (SIGA):
I don’t know that I’d hold onto this one for the long term, so we’re checking out the price action on the 65-minute chart — no extended hours.
I chose to cut that part of the chart solely due to the fact that the volume during regular trading hours creates an entirely different picture…
The Standard Deviation Channel (dotted channel) tells me that the stock likely legs down towards the second standard deviation before popping back up for a weak run…
But that doesn’t mean it’s over for good.
If you look to the lower chart, all indicators (RSI, MACD, Squeeze Trading Tool 1.0) are pointing towards a loss of momentum.
You have to figure, after the last week or so, SIGA has gaps to fill after a few rounds of profit taking.
Then, we have the support and resistance channels… There’s no break up top near the ~$15.00 mark and the closest support around ~$8.50 is a ways away, meaning the stock is essentially in no man’s land.
Right now, the 61.8% level on the Fibonacci Retracement at $10.85 should be the next stop.
With lower highs and shaky lows, my guess is SIGA gives a minor pop in the next day or two before falling below $10.00 to fill in the lost space, potentially dipping to $9.50…
IF it can settle and hold the high $9.00’s above the 21ema (neon green crossline), the run just might continue.
I’d keep it small…
(Disclosure: I hold no position in SIGA.)
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