BNGO
Has the down trend of BNGO finally come to an end? I am not one who believes in the reading of charts, I do understand the basis behind it though. The idea that humans exact in a certain way consistently, thus the charts should react in a similar way. I do not believe this is how people should invest, but I do understand the human tendency behind it. So if you want me to confirm your buy signals in this article, it is not the right one for you.
I would rather focus on what happened today and why, and what this means for the future. Today BNGO started off the day in a strong downward movement, hitting a low price of $3.73, followed by a close of $4.09. BNGO has been in a free fall in the last few weeks; my previous articles talk about this. I believe the dramatic drop in price today triggered many people, algorithms , and limit buy orders, to buy up this stock. The huge increase in volume today backs this claim; from an average of 9.3M to 12.81M today. As seen on the chart above I have highlighted the candlestick in which I am talking about. What does this mean for the price movement of the stock? TA would suggest this is the end of the downtrend, and I would agree to some extent.
To say that one strong day of buys is the end of a down trend is rather reckless thinking, but I would also argue that due to the intensity of the current downtrend, seeing a day of strong buying is a solid indicator that this may be our new floor. As mentioned in previous articles I believe in the sustainability and longevity of this company, and it will be interesting to see how the stock fair over the next couple of weeks. It is important to note that the NASDAQ and the BioTech industry has been down in this same period as BNGO; they are not standalone. If investors morale stays high towards this price it will increase buying power and create momentum in the direction long investors want it to go. That being said dollar cost averaging your way in, if you are a new investor to this company, is the way to go from here, as this stock is highly price elastic. The worst thing for the price of this stock would be a large spike in the upward motion, as it would trigger many people to sell who have held through this rocky road. In order to truly gain momentum in the up trend we will need to see gradual growth, gradual buying, No bad news, and a strong earnings report in March 2022.
Current Positions In BNGO:
Stock positions @$5.97
Short Call options @1.21 for a strike of $5, for 21-01-2022.
Long Put options @0.22 for a strike of $4, for 17-12-2021. This is to hedge against short term downside lost.
Long Put Options @0. 05 for a strike of $2, for 21-01-2022. This is my most recent addition to protect against a major free fall in price.
