Safe_Trades

FLGT bearish divergence

NASDAQ:FLGT   FULGENT GENETICS INC
What a day, huh? The markets responded positively to the Inauguration but FLGT fell about 10% (13% but it then recovered some). Seems like it is time for a pause for this stock after a long and healthy rally.

TECHNICALS

Weekly
There is bearish divergence between price and rsi (also on the daily, obviously).
We can see that FLGT has been riding the 14/21emas pretty closely, except when it rallied rapidly. However, after those couple of strong rallies it retraced to find comfort on the 14-ema.

The current rally resembles very closely the one of the week of jun 27 2020 (white rectangles): then it galloped with fury and created 4 green candles in a row to then retrace to the emas. This rally also created 4 green candles and now we have a red candle. We still have a couple of days to the end of this week but I believe we could see that same type of retracement to the 14/21 emas on the weekly. Perhaps it could continue next week.

That would be about 24% more downside (I am using the .5 fib retracement as a guide since it is almost in confluence with the 14-ema at the time of this writing).

Daily
We can also see a bearish engulfing candlestick pattern, which signals potential reversal (not trend reversal, but more like a retracement here).

Price reacted to the 14-ema and 1.272 fib retracement (BTW, this is the new auto fib retracement tool; pretty cool) but I think there is more downside to come.


MACD on both
On the weekly the MACD looks healthy but on the daily it is starting to curl down. Remember that higher time frames react faster, specially to sudden turns such as this.

TAKE AWAY
This is obviously speculation (although highly technical) and the price could revert from other support on the daily but I will wait patiently and see if we get to $52 or close to that mark. I would start buying only if the price moves to support on the 14-ema on the weekly (not financial advise).

I am not an oracle so this doesn't need to happen but that is what the charts tell me.

It is late and that is all I saw. If I see other important stuff I will update this analysis.

Safe trades my friends!

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