Many biotech companies have been surging and the SPDR Biotech ETF ( XBI) has broken out over the highs of 2018-2020. Let's check out the charts of Momenta Pharmaceuticals ( MNTA) , a biotechnology company with a scientific platform focused on discovering and developing novel therapeutics to treat rare, immune-mediated diseases.
In this daily bar chart of MNTA, below, we can see that prices have made new highs for the move up. MNTA is trading above the rising 50-day moving average line and above the rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line has moved sideways so far this year but it remains close to making a new high. A new high in the OBV line would help confirm the price gains.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but "waffling" a little bit - we could see a new buy signal or a take profits signal depending on the price action ahead.
In this weekly bar chart of MNTA, we can see the action of the past three years. We see a positive looking picture with prices in an uptrend and above the rising 40-week moving average line.
The weekly OBV line is bullish and tells us that buyers of MNTA have been more aggressive since late 2018. The MACD oscillator is bullish and poised to turn higher.
In this long-term monthly bar chart of MNTA, below, we can see that prices have been in a long-term sideways trend. Prices are up at the upper end of this big pattern and poised for a breakout to the topside.
In this weekly close only Point and Figure chart of MNTA, below, we can see a potential upside price target in the $61 area.
Bottom line strategy: The monthly chart of MNTA, above, is one of the longest sideways patterns I can remember seeing in a while. The shorter charts suggest that prices now have the power or ability for an upside breakout. Aggressive traders could consider going long MNTA at current levels and risking a close below $28. The $60 area is our longer-term price target.
