Capricor Therapeutics Inc (CAPR)

[stocktrademan]

I agree with the pole and the flag pattern, and would like to see a break to the upside mimicking the pattern we just saw a few months ago when it finally broke away from 1.00, but am concerned with how the 200-day and the 50-day are crossing over after just having broken through support on both. Also, that gap about 30% lower has me thinking that there will be continued pressure to get that filled. Hoping the gap well below $1.00 is not going to get filled.....ever.

Thoughts on these concerns?

Thanks.

There is a saying that all gaps should get filled and the price goes back and touches the gap area sooner or later but it doesn't say when or if that occurs. I think also it shouldn't because there is long term bullish divergence on the weekly chart. The macd has been making higher lows as the price has been downtrending previously and on this upswing it took out the previous high. So the long term mode of the chart is not bearish anymore. Then looking near term the past few days there is even bullish divergence in many indicators as they recover and make higher lows compared to the price.

The bull flag itself is a channel drawing lines on its highs and lows and the price is near the lows with a long buying tail currently. This is all happening on uptrending major moving average and near the lower bollinger band, in fact it has not only bounced off the lower band once but now it is pulling away as the price finds that support level (aka bollinger band divergence price reversal). Many times high reliability bottoms are found when the price makes a low outside the bollinger band followed by the first low inside the bollinger band, regardless of relative price levels, like it is now.

Some may also find that there will be a 'golden cross' moving average crossup pattren soon that would oppose any potential crossdowns. Others would also say there is majore moving average support under the price right now and it just has to be near the price regardless of any crossup or not.

While the 50 and 200 haven't crossed down yet but almost, let's say they do tomorrow for arguments sake, it will attract shorts sure but in the context of the whole long term and near term chart that looks like to me to be a bear trap. The price may not even go down and just pause here as some shorts settle in attracted by the same bearish notions you picked up on, while not realizing why bulls are quietly buying.

Sooner or later the buying will soak up the selling pressure, then one morning there will be a gap up and the shorts should freak and scram making the other side of the bull flag pattern in the same manner as the flagpole before.

So to me all these realizations for a high probability long trade with a close nearby stop and a good reward prospect. If I'm wrong well the lower part of the bull flag channel is a convenient low risk stop and I can always find another somewhere.

Since the flag pole target compared the stop is usually 3x to 1x then according to game theory then I can be random and do worse than a coin flip (unlikely) and still make a profit.

The fact that a 3:1 reward to risk ratio is present in the trade, makes it all the more appealing to longs and that should add even more buoyancy to the chart, and make it even that more risky for the shorts.

I think it is pretty safe to buy here without a lot of hesitation and if someone tickles some nearby stops temporarily it is to take the shares they know are going to gap up soon.... I doubt the existence of a gap 30% lower on the chart overrules the observations above, placing it all into context. Thanks for the interesting observations, whatever you decide to do that is the best decision. Remember these bull flags are like buses on a route there is another one on the way somewhere, so if you have any qualms about a chart just say next. Good luck!