FLGT What a pull back!

FLGT caught shareholders buy surprise when it dropped 20% from 135 level down to 105. Today at early hours of the day it went down to 90 level. A pull back in FLGT was anticipated due to following reasons: For one there is a rotational movement out of Health Care and Tech sectors and there is a net movement into Energy and Financial sector. Not mention the market is also showing signs of weakness. However, more than 30% pull back in 24 hrs in a leading stock in its sector is clear sign of oversold. Not to mentioned FLGT pulled back 50% from all time high in only less than 2 weeks. Without any major news or change the company there is no reason for such aggressive pull back.

Now lets look more in details into the chart. FLGT has been trending down for past 2 weeks in a channel. Today we had a momentary break out however it was not sustainable. At 65 EMA on daily and 15 EMA on weekly FLGT had an aggressive bounce back today and moved back to the trend. In next few days there are two possibility for this stock:

Given that market remains relatively stable, FLGT will continue to the upper band of the channel and either breakthrough and successfully changes the trend, in that case there are two point of profit taking at 125 level and 145 level highlighted in purple and green boxes relatively.

However are bound from the upper band will bring it back from 115 level to 90 level and than we will witness change in trend toward 130 level.

This is how I am going to execute this trade. I have added at 100 level today and going to to sell 1/2 of my position at the 115.00 if there is a pull back I will be adding. at 100 level again and exit my entire position at 130. However if there is a breakthrough and change in trend I will sell 1/4 at 125 level and 1/4 at 145 level.

This is my second post on Trading view if your feedback is appreciated.

Comment:

As predicted FLGT test the upper band of the channel today. Premarket and into opening it briefly broke it. Tomorrow is critical at any price above 120 we can confidently conclude that FLGT has broken out down trend and is on its way to 130 and 140 levels, 127.50 is a strong resistant which is needed to break for a swift uptrend movements toward those price levels.

Comment:

Well so far FLGT has been confined to my trend, however under surface, things are changing, volume is declining, meaning that buyers are already locked in their long positions and sell off has ended accordingly. Now the movement depends on the new wave of buyers or increase in short interest (less likely). Tomorrow we may have slight pull back from 100 level to 90 level, however bounce back can be rapid. Also the market as a whole is showing signs of weakness which to some extend is already priced in FLGT. Hence any pull back won't be significant, however; depending on market conditions up trend movement can be significant.

Comment:

FLGT gave a perfect DOJI today. The put/call ratio has increased significantly, at the same time the short volume dried up for today. It successfully held 100 price level. All of this signals that former holder of FLGT are not selling and there is no new short sell positions in FLGT, some shorts covered today but overall bears and bulls are holding on to their positions. Given that market continue to recover next week and recent pull back on spy starts to recover we should see FLGT going up from here at any price level above 120, recovery will be very rapid into 140 levels as short sellers start to cover and stock will pick up momentum. However, breaking the resistance at 120 level is a key. Going forward I will sell off half of my accumulation at 120 level and hold on to the other half and plan to exit my position at 130 - 140 levels.

Word of caution: Market is very volatile and fear of major correction is already here! If it is going to be realized or not is very hard to tell at this point. Current market situation right now is that sellers are not selling and buyers are hesitant to come forward. This scenario can drastically change in very short span time. Would I buy if something is oversold? Absolutely yes. Would I ride the trend one a stock right now. No, that can change at anytime! So be careful out there!.

Comment:

Well so far so good, today the momentum has picked up in FLGT and change in trend is clearly here, we are clearly in uptrend and buying was significant in FLGT. The short volume didn't pick up, signaling that bulls are in charge when it comes to FLGT. In order for FLGT to make to profit taking levels of 120s we need clear breakthrough at $117.00. Given today momentum. If there is no major news it is highly likely that that goal even gets realized outside of regular hours. A very good initial profit taking would be around 125.00 I would sell 1/2 my position and 1/4 at 130.00 and 1/4 with 5 dollars trailing stop!

Comment:

Are we back to down trend? I don' think so, even though short sellers are coming forward it is not very impressive. Today we saw an organic sell off with lots of people capturing profit from aggressive upward movement yesterday. Also, the market cooled off today post yesterday rally. FLGT movement was consistent with market however by no measure FLGT is an out performer right now! What Data is telling is that participants are mostly holding on to their positions in anticipation of earning and potential buyers are having their hands in their pocket for the same reason. Is there anybody actively and aggressively shorting FLGT? I do not think so! So, what chart is telling me is that as long as we do not break through our support level (Green) we are safe and as soon as we break through 117 resistance level, we are on our way to 120 levels. Earning reports can shake ups this stock in either direction, however change in direction will be temporary and definite buyers and short sellers will define the direction of the stock.

Trade closed: stop reached:

Well, this is it! I have stopped out of 1/2 my position at $90.00. FLGT it made one solid bar below my resistance line (green) and it is time to take some loss and look back when FLGT becomes healthier. As always trading it is not about calling the price levels anyone with enough of practice can do that! it is about making logical decisions rather than getting emotionally invested! It is time to call the shot on FLGT and be responsible! I am keeping half of my position in case earning cause a drastic change in the trend (not likely) and I am comfortable holding half of my position for long term! Be careful out there and remember the key to success in trading is knowing your limits and manage your risk. Taking loss is part of the game and there is no shame in it! Sticking to a bad trade however is stupid and burns you to the ground!

Comment:

Is it only me or did anyone of you reading this expcted 30% move after earnings. The good news is the stock cracked 117 resistance level which I was waiting for since opening my position. The bad news is market and health care sector are in no good shape. We might have a bounce back in the market after todays blood bath. FLGT for sure will move up with the market, however willl it be able to sustain at price levels above 130? while market makes its way to 3600 levels, I do not think so. However the future for this stock is bright I will be holding some!

Comment:

What a day, so far, we have recovery in the market and in all the sectors, especially health care. However, FLGT did not benefit as much from this recovery, will this recovery be sustainable or are we going to see more downward movement, I do not know that. Neighter nobody else. SPY can go to 390 and fall on its face or it can keep ripping up to 400 from here. Alternatively, this can be deceptive Friday. As on Friday afternoon lots of people cover their positions going into weekend. We shall see on Monday. However, word of caution market can go either direction. Keep buying your unicorn stocks as they go further down however, do not end up in a risky position where you end up selling at loss!!!! Remember Trading is 90% about how you control your emotions, rest is skills which comes with time!

Comment:

*Important* New set of data is in and it indicates that FLGT short volume was unprecedented on Friday! MORE THAN 3X THE AVERAGE! It is not clear how many of shorts have already closed, however; at one point or the other they have to buy back, either to capture profit or to stop from bleeding. What it really means? Well, FLGT had potentials to make it to 120 levels today may short seller didn't rush to it. Therefore, this is stock not only at mercy of buyers coming back but also shorts to closing their position. Any slight uptick in the price of FLGT can drastically shake this tree, Monday is extremely important! If FLGT makes it to 120, it will have drastic upward movements! The good news is any downward movement will be faced with intense buying pressure as shorts try to capture profit! Therefore any pull back in the stock is a great buying opportunity!

Comment:

FLGT, is going to test 117 level for 2.5 time (one of which happened during after hrs since end of rapid downtrend started at 180.00. It is not yet clear how many of short positions from March 5 have covered the numbers weren't impressive on Monday so I think much of short coverage happned today! We have to wait for the data to roll in, however, if the trend continues like this and we have an explosive breakthrough at 117.00 I would raise my exit price! Another good news is rotation into healthcare started however it is not as impressive as tech! If momentum slows down I would try to get out at 125 level!