Sunday, December 17, 2017

Shorts Forced To Cover In Biotech Exelixis?

Following up on the previous post from the forums, here is an updated chart.

Exelixis (NASDAQ:EXEL) has been resting near support lines at the bottom of the trading range that was established in early March. If after hours action Monday night is any indicator of the pre-market action Tuesday, we can expect EXEL to open up between $12 and $12.40, which is just below the first key resistance at $12.50 and the next being about $12.82 (52-week high).  If this does indeed happen, I will look to book some early profits by reducing some of my position and watch the action to determine my next move.  If bullish volume seems strong, I’ll look to add on a breakout above resistance and peel off near resistance in case we struggle to break levels.  The key is moving fast, according to the plan, which reduces risk.  As of March 31st, Nasdaq.com has short interest of 10.5 million shares, which is about 5 day cover at current average volume.  This gap-up could force short covering, helping fuel a surge of volume fueling EXEL past resistance levels.  Look for the pre-market volume to help dictate whether that will take place or not on Tuesday.  The earlier the volume starts, the better chance we have at attracting more market players.  See the chart below for further analysis.

 

Daily Chart

 

Intraday Chart Showing Bullish Divergence – Accumulation

EXEL BIOTECH TRADING STRATEGY ON FORUMS W/CHART AND DISCUSSION

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As always, do your own homework to see if you agree.  Good luck out there.

Mike

At the time of publication, Kudrna was Long EXEL but positions may change at any time.

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