One caller during Monday's "Lightning Round" segment of Mad Money asked Jim Cramer about Bionano Genomics (BNGO) : "Buy this one for speculation and only for speculation," said Crarmer about the company that provides a platform to analyze the long segments of genomic DNA and other biomolecules structural variations. Heady stuff.
Let's check out the charts and indicators.
In this daily Japanese candlestick chart of BNGO, below, we can see that BNGO was a "penny stock" until all of a sudden it wasn't. In just two months prices soared from less than a dollar to around $15 - pretty amazing. Prices gave up half the rally from late February into March and have been trading below the 50-day moving average line. The moving average line appears to be acting as resistance.
The On-Balance-Volume (OBV) line soared sharply from December into January and then went sideways with a slight drift lower. Overall the OBV line is suggesting that buyers of BNGO in December and January have largely stayed with those longs. If they have liquidated (taken profits) they have been very quiet about it.
The Moving Average Convergence Divergence (MACD) oscillator has moved below the zero line for an outright sell signal.
In this daily Point and Figure chart of BNGO, below, we see only a nearby price target of $10 or so.
In this second Point and Figure chart of BNGO, below, we used weekly close only price data. Here the software is projecting the $39 area as a potential longer-term price objective.
Bottom line strategy: I have a problem with stocks that trade for pennies one day and then soar higher the next. I like to see proper bases formed with signs of good accumulation like the OBV line rising for months. That is lacking on BNGO. Longer-term we might see prices go up four-fold from here but that seems like a speculation right now. A close below $7 weakens the chart.
