Wall streets darling DNLI halts at key resistance

Since the pandemic March lows, Denali Therapeutics Inc ( DNLI ) has enjoyed a multi-month rally surpassing it’s January ‘20 highs with ease, amid a bout of increased buying activity following Q2 earnings . As well as individual investors, hedge funds are also optimistic about the future share price of DNLI . Official data shows the number of hedge fund bets increased to seven, meaning the bullish number of hedge funds currently holding positions in the security is at an all-time high.

DNLI is currently trading at 41.56 at the time of writing, which is a key level of interest as it tests multi-month fib extension at (3) taken from the highs of January ‘20 at (1) and the lows of March this year at (2). Coupled with that a well-formed rising wedge pattern is in play whereby it’s resistance line junctions exactly at fib extension (3). A break above this dual resistance cluster would be considered all the more bullish , with a view to 45.00 as the next target to watch for.

Any pullbacks around these current levels are expected to be shallow and short-lived, providing better buying opportunities for the midterm. Below wedge support throws this bullish outlook into question for the short to midterm.


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