A fundamental analyst at a sell firm rated Beam Therapeutics (BEAM) as fresh “market performance” on Friday with a price target of $41. Let’s take a look at the charts from this company that uses CRISPR technology to perform what are called core edits.
In the BEAM daily bar chart below, we can see a long price decline and recent stability around $30. Prices tested the lower 50-day moving average earlier this month and we may see another test of this indicator in the days ahead. The slope of the 200 day line is negative and with prices at half the value of the 200 day average, we could consider BEAM extended (oversold) against this longer term indicator.
The On-Balance-Volume (OBV) line is showing some improvement from its low in early May and this tells me that traders are becoming more aggressive buyers. The 12-day price momentum shows us higher lows from April to June with prices reaching even lows. This is a bullish divergence and ideally points the way to a rally.
In BEAM’s weekly Japanese candlestick chart below, we can see some positive hints. Notice the lower shadows around $30? This tells us that prices have reached a level where traders are rejecting the lows. The slope of the 40-week moving average is still negative.
The OBV line is still weak, but the 12-week price dynamics study shows improvement from early May.
In this daily Point and Figure chart from BEAM, below, we can see a price target of $42.
In this weekly Point and Figure chart from BEAM, below, we can see a potential downside price target at the $17 area. A trade at $42 should make this chart more positive.
Basic strategy: Aggressive traders could probe the long side of BEAM at current levels, risking a close below $27. Look for payouts up to $40 to start.
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