Hello fellow traders. We are experiencing a respectable pullback on many names these past few days. CRISPR is one of them. This stock has actually been in correction for sometime now, which picked up pace after disappointing earnings last week. We may see more downside in the short term if the market continues the selloff but this company is definitely a buy in my opinion. They have very good prospects to become the main gene editing company in the business. I had actually been waiting for a dip to enter a position, which I did last Friday. I am adding more as it goes down. I am not expecting it to moon tomorrow (which it will not), but I think the correction on this one may be coming to an end sometime soon. Also, the fact that this is one of the top holdings of ARK investments gives me that extra reassurance to buy.
TECHNICALS You can see that CRISPR formed a head and shoulder pattern and broke down a few days ago. Although the right shoulder is kind of malformed, there is enough symmetry between the top of the two shoulders for us to can consider this a head and shoulder. Today the price breached and closed below the 100ema, which hasn't happened since May 2020. We are now on support of the .618 fib level (AKA inverse Golden Ratio), which in theory is strong. If this support doesn't hold the next stop is most likely the 200ema, which at the time of this writing is very close to the .786 fib level. The price can obviously change directions anytime but many traders like you and me are looking at the same indicators so the 200ema is a good anchor point.
The RSI is about to cross to oversold level, a zone it hasn't been since March 2020. At that time it didn't stay in oversold for too long (about 4 days or so). Although past action doesn't indicate future behavior the quick reversal of the RSI direction is a good precedent if you want to buy in or already own the stock. Additionally you can see that the OBV isgetting close to the trendline support (yes, we can trace trendlines on the OBV too).
HOW TO TRADE If you want to enter for the long term you can start dollar cost averaging (like I did) or wait for a clearer signal of reversal if you are more conservative. You may look for a bounce from either the fib levels or the emas as well as wait for a MACD bullish cross over. To me, anything between the 100ema and 200ema is a buy on this one.
Safe trades and good luck!
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***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
Comment
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Bounced very close to the 200ema as I expected. Let's hope the selloff loses steam so we can start this reversal.
I noticed the H&S. We are retracted WAY past 50% about to bounce from the 61.8% of the move from my Fibo.
On the Daily it hasn't hit the 100 EMA and Stochastic is Oversold on Daily but crossing for more selling pressure.
I'm not in panic yet if the 100 EMA holds. Where in-between 2/ 61.8 Fibo and the 100 EMA. So it's going to be interesting if we break 135 might be looking at 100~ area
Safe_Trades
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@Imperial_Peak, hey there buddy. We are a few percentage points below the 100ema already (the blue EMA on the chart). I am not sure which EMA you are looking at. I think we may see more retracement. I am ready to buy calls at around 120, where the 200ema is sitting at the moment. It should probably move down a little if we keep retracing. We will see. Safe trades!
Imperial_Peak
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@Safe_Trades, Just checked. You are correct. Turns out I had the 100 MA on my chart not the EMA at the time. I think we are definitely retracing heavy from the 100 EMA standpoint. I see a good buying opportunities on the horizon. The technology is so green and ripe for life changing innovations looking forward to breaking ATH hopefully end of the year.
I like this a lot