Biotech stock Crispr Therapeutics Inc’s (NASDAQ:CRSP) recent rally seems to be losing steam as the shares are on track to end a seven-day winning streak, slipping 0.6% to $42.69. After reaching its highest level since March, the stock is now showing a bearish signal on the charts.
According to Schaeffer’s Senior Quantitative Analyst Rocky White, CRSP has approached its 260-day moving average, with the security trading within 0.75 of the trendline’s 20-day average true range (ATR) after spending the majority of the last 10 days and two months below it. This scenario has only occurred five times in the past three years, with CRSP seeing lower prices one month later 80% of the time, averaging an 8% decline. If history repeats itself, the shares could drop below the $40 level, which served as a resistance level from mid-April to late last week.
Moreover, options traders have been overwhelmingly bullish on Crispr Therapeutics stock in the last two weeks. The International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have seen a ratio of 14.50 calls bought for every put, a level higher than 99% of readings over the past year. A reversal of this optimism could add further pressure on the stock.
As the June rally begins to fizzle out, investors will be closely watching how CRSP performs in the coming days. With technical indicators flashing bearish signals and options activity skewed towards bullish sentiment, the stock could be in for a period of consolidation or potentially lower prices. It will be interesting to see how CRSP navigates these headwinds in the near future.
