High Flyer and what I see from a Technical AspectThe last one for this newsletter is one that came up on my scans Tuesday night as a "High Flyer" with more than 20% gains in the last 5 days. I was not surprised to see the number tech stocks that fell into this group but many of them had fizzled and died within a few days after their initial pop and we saw a bunch of "We don't know why our stock is moving" press release a day or two later. Great if you're a flipper and can make a quick double or triple, but they also drop as fast as they go up if nothing is supporting the move.
Biosign Technologies stood out from the rest of the crowd. They had recently presented at an annual health conference; "Biosign Technologies to Present at the Burrill Digital Health Meeting" and shortly there after put out a press release that their master distributor was increasing orders by 150%; "Biosign Master Distributor ALQAEM Increases Initial UFIT Order by 150%". Doing a little research on them I found that they have a recurring revenue model for the UFIT application. This means monthly revenue for each installation they do. Having been in the software industry for over 30 years, this is the best revenue source you can have. Its not an easy model to make and even harder to sell to your customers, but if you can arrange and present the benefits of it to your clients, its simply the best. But enough of the Fundamentals (again), this is a Technical Update Newsletter and let's get to the meat of it already!
Again, let's take a look at the daily chart followed by an intraday chart. The daily chart shows resistance (now support) at $1.79 and when I looked at it Tuesday night, we had closed exactly there. On the previous day it had a little look-see above the $1.79 area but failed and also closed at $1.79. So on Wednesday I thought if the share price starts to move above the $1.79 mark it might be good for maybe 10 or 20 percent gains from here. Looking at level 2 data there really wasn't much on the bid/ask and the spread was a little wild at times with a spread of 5 to 15 cents at times. I was a little worried looking at the chart because this is typically not a chart I would have bought into, the indicators were already overbought and I tend to shy away from those. But volume kept on building and the price kept moving up. The intraday chart had formed a nice trend channel and entry seemed right.
Wednesday we closed at the high of the day and was feeling pretty good. Thursday brought a morning caffeine rush with a pop at the open and a drop after 10:15 am. Friday was an explosive day with high of $2.70 and a close of $2.56. So if we look at the intraday chart, its pretty clear to me that it has formed a well defined trend channel and has jumped to the next higher trend on a long-term trend. The orange lines is the current attack channel where Thursday's top meets Friday's top before the pull back. I've outlined in red what I expect to see over the next few days. If the new long-term top channel holds, which I believe it will, we should see a maximum pull to $2.40 before it makes its next move upwards and attempts to hit the top of the attack channel placing short term target at $3.08. This also coincides with the daily chart's FIB extension of 127.2% from Friday's high.
So if you can get an entry around $2.40 over the next few days, your potential here in a short period would be 28.3% and if there's any more news on this company, it could drive it up much further. One thing that was interesting to see on Thursday and Friday was which house was buying the most. Both Dundee and Questrade were talking up everything that seemed to be for sale, so they are accumulating this stock.
Disclosure, I bought into this stock on Wednesday as it made technical sense to me. I am not pumping or promoting this stock, just calling the technical aspect of it as I see it.
See here for charts: https://us1.campaign-archive1.com/?u=4d6d491aea8e01d93d8a1f390&id=384608da49#BIO
Cheers!