In Thursday night's Mad Money program, the Lightning Round was interesting. Jim Cramer said this about Sangamo Therapeutics (SGMO) , "This is great for speculation." Using that comment as a starting point let's take a look at the charts and indicators.
In this daily bar chart of SGMO, below, we can see that prices were in a downtrend from February to a low in November. From November the trend has shifted from down to sideways. SGMO has been testing and sometimes closing above the declining 50-day moving average line.
The 200-day moving average line has been acting as resistance for SGMO in June, September and October. If SGMO can rally to $15 it will break above the 200-day line.
Even though prices were in a downtrend until November, the daily On-Balance-Volume (OBV) line has been neutral or sideways for the past year suggesting that prices fell of their own weight rather than aggressive selling.
In the lower panel is the 12-day price momentum study which shows improving momentum lows from November to December versus equal lows in price. This is a small bullish divergence but it can still foreshadow stronger price ahead.
In this weekly bar chart of SGMO, below, we can see that prices are just about $2 below the declining 40-week moving average line.
The weekly OBV line looks much different than the daily line but the line has been improving the past three months.
In the lower panel is the 12-week price momentum study. The chart shows a higher low in momentum from May to November/December even though prices make a higher low. This is a bullish divergence and it could foreshadow price strength in the weeks ahead.
In this Point and Figure chart of SGMO, below, we can see that prices are in a downtrend but that a trade at $12.00 on a weekly basis could be positive.
Bottom line strategy: Remembering that Jim Cramer called this a speculative play, traders could go long here risking a close below $9.50, or a new low close. Let's see what how a small position performs.