A biotech name closely monitored that has been on our radar since the stock's explosive up move during the height of the Covid vaccine and therapeutic drug hype last July-August is Sorrento Therapeutics (SRNE), says Mike Paulenoff of MPTrader saw reason for caution.
Last week, on March 1, we posted the following update for our members:
"Once again, Sorrento Therapeutics announced good news (see below), but gets no respect—a common theme with this name several months since its big Covid therapy anticipation run on the upside. Although the stock is up more than 6% (today), the strength, so far, has failed to hurdle key nearest resistance at 10.70. Unless and until that happens, SRNE will remain vulnerable to another loop lower that tests and likely marginally violates last week's low at 9.40. If such a scenario plays out in the upcoming hours/days, then I will be looking for a technical upside reversal signal in the 9.40 to 8.70 target window, that will initiate a new, powerful upleg...last is 10.27...."
We followed up on March 4:
"SRNE has tested and held major support (see my chart below) in the vicinity of 8.00-8.25, which should be used for risk-management purposes for anyone looking to enter the long side at a 50% discount to where SRNE was trading less than four weeks ago! Granted, SRNE still gets no respect, but the company has many products and procedures in its pipeline, and one of these days, this biotech name will get the respect it deserves...last is 8.88...."
The following session, Friday March 5, SRNE hit a low at 7.92, and then reversed sharply to close at 8.94, an intraday U-Turn of nearly 13% off of a four-month support line, which has triggered a preliminary bullish signal in Mike's work.
If SRNE follows-through to the upside above 9.15 on a sustained basis early this coming week, opportunity will be knocking on the door for traders and investors interested in SRNE after its four-week, 55% "haircut."
Mike Paulenoff is co-founder of MPTrader.com, a live trading room featuring his analysis on the key key market indices and bellwether stocks & ETFs.
