Here’s my take on Regeneron (REGN). (June 11, 2015)
I want to take a real quick look here at Regeneron ( NASDAQ:REGN ). Look, this biotech stock has been going up for quite a while. It really had about as close to a textbook bowl here as you could get. Actually not perfect but close enough. This was a sideways consolidation; these moving averages converged led by a sideways consolidation, a breakout, another base, and then a breakout. Now we’ve got a little pullback.
My bet would be that the uptrend is still intact here; that’s not a bet that’s a fact. But my bet would be this stock is going to have some consolidation for a while. You look at it’s relationship to the 50-day moving average and it’s working. The 200-day moving average, and it’s working. Big point of sale yesterday, big gap down and then it just stayed there. Today, selling volume did not surpass yesterday’s low.
And by the way yesterday’s close was higher than the open. That tells you that the bears capitulated during the day, because otherwise the stock would have closed at the low end of the range. Today the stock opens up about flat and now the bears are not capitulating, they are in charge. However, watch this level, watch 498.60. If the stock falls below that level, well the bulls are no longer fighting. But even then, what happens? We pull down; we’ve got support right around the 50-day moving average.
So the point is, if you wanted to sell the stock 540.00 is the place to sell it. You didn’t make that; you’re down $40.00, from the precise top. You’re still fine because the stock continues to trade above this 50-day moving average and this is typically where disciplined traders buy. They’ll wait for a pullback, sometimes it doesn’t quite get there, it’s not a self-fulfilling prophecy it’s just what happens.
But you watch and see what happens, if this stock pulls back to the 50-day moving average, if it starts to bounce, if it finds some support that’s when you buy this uptrending stock. You buy it when there’s evidence that the sell off has run its course. Yesterday could have been that evidence but then today, not so fast there. So just watch this stock, wait for signs that it actually is bottoming, that this selling is truly done, and that’s when you take your entry.
Free Chart