It is imperative that we hold and close above the 50 day moving average of $4.27. If it were to close right now, it looks to be forming a Hammer candlestick, which would indicate a bullish reversal.
"The Hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session. However, the strong finish indicates that buyers regained their footing to end the session on a strong note. While this may seem enough to act on, hammers require further bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further buying pressure, and preferably on expanding volume, is needed before acting. Such confirmation could come from a gap up or long white candlestick. Hammers are similar to selling climaxes, and heavy volume can serve to reinforce the validity of the reversal."
I would also like to see confirmation with 1) volume, 2) upward reversal and cross in the MACD and the Full Stochistics, which are in over sold territory, and 3) a turn up in RSI.
People say that TA can not be used in biotechs, and I believe that is not the case. Of course, news trumps all TA; however, without news, TA can definitely be used for buy/sell targets.
UPDATE - WOW, We bounced nicely off the 50 day today and formed that hammer I was looking for! Also, RSI closed back over 50, which is bullish. I am still looking for the MACD and Full Stochistics to cross up. Maybe in the next couple days. Either way, nice close today!
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