Immunomedics Stock Has Its Sights Set on Higher Prices

Immunomedics Stock
Credit:iStock.com/Yozayo

IMMU Stock: Bullish on Multiple Time Frames

The focus of this publication is Immunomedics, Inc. (NASDAQ: IMMU) stock. This clinical stage biotechnology company develops treatments to boost the body’s antibodies in order to fight serious diseases like cancer and autoimmune disorders. I have mentioned in a number of publications that the biotechnology stock sector has begun to perk up, and IMMU stock is no exception. I am bullish on the stock because the method of analysis I employ to generate a view on an investment suggests that a bullish view is warranted on Immunomedics stock.

For those who haven’t read any of my previous works, I generate my views on an investment by analyzing the company’s stock chart. This method of analysis is called technical analysis and it is based on the notion that historical price and volume data can be used to speculate on what the future may bring.

The performance of this investment this year has been spectacular. IMMU stock is up $160.22 on the year and further gains are expected. The company’s stock chart is bullish to say the least and it is generating bullish indications on multiple time frames.

The following Immunomedics stock chart illustrates the indications that are supporting the current advance.

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Immunomedics stock chart

Chart courtesy of StockCharts.com

This IMMU stock chart illustrates a bullish trend, which contains higher highs and higher lows. If you’re not aware, this stair-step price action is the quintessential characteristic that defines all bullish trends, and it creates the stereotypical price chart that begins in the lower left and ends in the upper right.

Connecting the lower lows on the stock chart creates an uptrend line. This uptrend line defines a significant level of price support, which acts as a dividing line. This uptrend line is so significant that as long as IMMU stock is trading above it, then the advance that began in November last year is still intact and therefore in true bull market fashion, higher prices should follow. The caveat is that breaking below this dividing line would suggest that the bullish advance has come to an end.

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Each and every time the uptrend line has been tested, it has been accompanied by a bullish MACD cross. MACD is an acronym for moving average convergence/divergence, and this indicator is used to determine whether bullish or bearish momentum is influencing the stock price.

Momentum is a factor that is required whether a stock is set to stage an advance or a decline. This is because momentum paves a road of least resistance. Thankfully for the bulls, each and every time the uptrend line was put to the test, a bullish MACD cross was quick to show its face and a bullish advance quickly followed.

This stock chart on its own is enough to justify a bullish view on this investment, but it’s not the only indication suggesting that IMMU shares are on pace for further gains. The following long-term Immunomedics stock chart paints a striking and compelling picture, suggesting that this bullish advance has much further to run.

IMMU price chart

Chart courtesy of StockCharts.com

This stock chart illustrates that in May of this year, IMMU stock was finally able to break above a significant level of horizontal resistance. This level of horizontal resistance is defined simply by connecting the peaks on the stock chart that occurred in 2009 and in 2013.

In the aftermath of the financial crisis, this horizontal level of resistance that stood at $7.30 thwarted all previous attempts to move beyond it. Breaking above it suggests that the stock price is set to make an advance.

The price action that followed the break of this horizontal level of resistance has served to reaffirm the bullish implications suggested by it. After the breakout that occurred in May of this year, the stock returned to test this horizontal level of resistance from above. Returning to test a previous level of resistance is known as a backtest and it serves to reaffirm that the break above resistance was legitimate while simultaneously establishing this price point as a new level of support.

A successful backtest that is followed by new highs suggests that higher stock prices are on the horizon. Immunomedics stock has just accomplished this feat, suggesting that this investment has its sights set on higher stock prices.

Analyst Take:

Immunomedics stock is a compelling investment because it complies to rules set out by technical analysis. This method of analysis suggests that a bullish view is warranted. There is a multitude of indications on different time frames that support and reinforce this bullish view. I am keen to see what the future bring because I have the inclination to believe that IMMU stock will be surprising to the upside.