Bearish engulfing pattern on Immunomedics could be a bad sign
Analyzing biotech companies is trickier than it is with other sectors. Many firms in the sector will lose money for years until a breakthrough happens and then, BAM they are profitable. Until that breakthrough happens, you are left to analyze the technical aspects of the stock and monitor the news from the company. One such company is Immunomedics (Nasdaq: IMMU), a clinical-stage biopharmaceutical company.
The company has lost money in each of the last three years and the losses have been increasing rather than decreasing. Even with such results, the stock hasn't been tanking. In fact the stock moved up quite nicely in 2017 and halfway through 2018. For 2019 the stock seems to a bit range bound between the $12 mark and the $20 mark. I know that is a rather large range, but the stock jumped from $4 to $16 in 2017.
What got my attention about Immunomedics currently was the pattern in the candlestick chart on November 6. The stock opened at $17.88 and closed at $17.18 which created a red bar on the chart. What makes it a bearish engulfing pattern is the fact that the open was higher than the previous day's high and the close was lower than the previous day's low—the body of November 6 engulfs the body for November 5.
In candlestick charting, this is known as a topping pattern. I circled two other bearish engulfing patterns from Immunomedics past and they both came at temporary high points for the stock. The one in September is particularly strong as the stock fell immediately from the $17.50 level to the $12.50 level in only two weeks.
In addition to the bearish engulfing pattern, the higher Bollinger Band was broken on November 4 and could indicate that the price could fall as the ticker heads toward the middle band. In 46 of 54 cases where Immunomedic's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued downtrend are 85%.
I mentioned how the company has been losing money, but let's look at some of the fundamental indicators from Tickeron. The fundamental analysis overview highlights figures that are in the upper third of ratings in green, and Immunomedics doesn't have any fundamental indicators with green highlights.
The best rating for the company is the Price Growth Rating at 38, indicating steady price growth. The Profit vs. Risk Rating for the company is 50, indicating well-balanced risk and returns. The average Profit vs. Risk Rating for the industry is 90, placing this stock better than average.
The Tickeron Valuation Rating of 65 indicates that the company is fairly valued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The Tickeron SMR rating for this company is 98, indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
Immunomedics released earnings on October 30. The loss per share was $0.49 and that was worse than expected by analysts and it was worse than the $0.35 loss a year ago. Especially troubling was the fact that the company didn't generate any revenues in the third quarter of 2019. That is a scary statement right there.
BIB sees MACD Histogram crosses below signal line
BIB saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on April 02, 2024. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 45 instances where the indicator turned negative. In of the 45 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 02, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on BIB as a result. In of 86 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
BIB moved below its 50-day moving average on March 28, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BIB declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for BIB entered a downward trend on April 23, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where BIB's RSI Oscillator exited the oversold zone, of 29 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 9 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BIB advanced for three days, in of 340 cases, the price rose further within the following month. The odds of a continued upward trend are .
BIB may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
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