For his "Executive Decision" segment of Mad Money Tuesday night, Jim Cramer spoke with George Yancopoulos, co-founder and chief scientific officer of Regeneron Pharmaceuticals (REGN) , the biotech that closed up 11.5% Tuesday on the company's announcement of progress toward treating Covid-19.
(For more on REGN, see Stephen Guilfoyle's The Magic Mice of Regeneron)
Yancopoulos said there are four things happening right now. First, public health officials are attempting to contain the spread of the disease and give our healthcare industry time to catch up. Second, companies are looking to see if old treatments that are already approved can be used. Third, companies are racing to develop and test vaccines to help prevent future outbreaks. And finally, biotechs are working on all new treatments for this virus.
This week, Regeneron began testing an existing anti-inflammatory treatment that is showing a lot of promise in helping the most severe of coronavirus cases. Yancopoulos said the treatment must still be proven.
We looked at the charts of REGN yesterday but with things (read: stock prices) changing so fast it wouldn't hurt to look again.
In this daily bar chart of REGN, below, we can see that REGN made a new high for the move up yesterday. Prices closed higher but not at the highs of the day. Volume was stronger than the previous day but not stronger than late February.
The On-Balance-Volume (OBV) line did turn up as it should have but it did not make a new high. Basically it was a good day but not a great day on the chart. The Moving Average Convergence Divergence (MACD) oscillator did narrow but it did not cross to the upside for a fresh go long signal.
In this weekly bar chart of REGN, below, we looked at a longer time period than we did yesterday. In this chart we can see that prices have broken above the 2019 highs. The highs of 2017 are not far away and old enough to be less likely to be considered serious resistance.
The technical studies are, of course, bullish with a positive slope for the 40-week moving average line, a bullish OBV line and MACD oscillator.
In this updated daily Point and Figure chart of REGN, below, we can see that prices made a new high for the move up and the price target is $686.
Bottom line strategy: While REGN is showing superior relative strength (RS and not RSI) we never know if an algo somewhere will turn out to be a seller. For now I will stick with what we wrote yesterday: "The charts of REGN look very bullish right now, but trading this stock will probably not be easy as money washes in and out with the click of a mouse. Trade from the long side but keep positions small until strength above $503."