Biotech IPO Breakout – NanoString Technologies (NSTG)

Earlier today I mentioned that the small biotech/pharma plays have really been moving and while I typically stay away from these highly risky and volatile plays, they can provide for outstanding shorter term trades with smaller positions.  This morning I highlighted the trade in ENTA which staged a big breakout and just needs a retrace of that move to provide an entry.

Another trade I’ve got my eye on is NSTG which is flashing a chart that looks like it might be ready to explode higher.   The company is in the instrumentation and analysis business which is obviously less risk than a company relying solely on pharmaceuticals, but still considerably risky (albeit with a potentially huge reward).

The stock exploded higher on September 10th after news of FDA clearance for its breast cancer testing.  This from Seeking Alpha:

  • NanoString Technologies (NSTG +41%) soars after receiving FDA 510(k) clearancefor its Prosigna diagnostic test.
  • The test uses the gene expression profile of cells found in breast cancer tissue to assess a patient’s risk of distant recurrence of disease.
  • Prosigna is the company’s first FDA-approved in vitro diagnostic assay, and CEO Brad Gray notes the approval “marks a milestone for NanoString and is an important step forward in the treatment of breast cancer.”

While I typically focus on the technical action in the chart for shorter term trades, it’s a good idea to get an overview of the company you’re about to put cash in to.  Here’s a good place to start.

The chart of NSTG is exceedingly bullish, with a nice pennant formation squeezed to smaller price swings and ultimately resulting a breakout today from this bullish formation.  If you got in today, you’re sitting great.  It would still provide entry in the morning if it doesn’t gap up big at the open.

Be sure to get your free daily technical analysis of NSTG here


2 thoughts on “Biotech IPO Breakout – NanoString Technologies (NSTG)”

  1. NSTG provided a perfect entry point just above $11/share in the first hour of trading. You’re already up 10% if you got in and intraday trading volume looking terrific. Explosive potential here..

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