PTN Stock: Indicators Are in Bullish Alignment
The markets are under duress and the thoughts of a trade war have sent chills down the spines of investors. Volatility remains elevated, and anyone who has been reading my publications understands that high volatility is not conducive to a bullish market. As a result, the markets are currently geared toward lower prices.
This might sound strange, but, as a stock picker, this unsettling market has made my life a little bit easier. Finding stocks with underlying strength that are poised for further gains has become a tiny bit easier because there are only a handful of stocks that are advancing on any given day, instead of the hundreds when the markets were rising.
In my search for stocks poised for further gains, I have come across Palatin Technologies, Inc. (NYSEAMERICAN:PTN).
I believe that Palatin Technologies stock is poised for further gains because it has just broken out of a technical price pattern which implies that higher PTN stock prices are on the horizon. Aside from just this pattern, there are underlying indicators that are supporting the notion that further gains are in development.
The technical price pattern suggesting that PTN stock is poised for further gains is highlighted on the following Palatin Technologies stock chart.
Chart courtesy of StockCharts.com
The technical price pattern highlighted on the Palatin Technologies stock chart is a trading range.
A trading range is created when a significant level of price resistance and a significant level of price support contain the stock price. The longer a stock oscillates between levels of price support and price resistance, the more significant the trading range becomes.
The trading ranges on the above chart illustrate that price support resided at $0.80, while price resistance resided at $1.05. These levels are highlighted on the Palatin Technologies stock chart using two parallel trend lines.
This pattern was in development for four months and on March 21, PTN stock finally closed above resistance, completing the trading range.
Breaking above resistance implies that PTN shares are now geared for higher prices, which is a notion supported by both the price action and an inflation momentum indicator, which are highlighted on the following Palatin Technologies stock chart.
Chart courtesy of StockCharts.com
This PTN stock chart highlights the price action and an underlying momentum indicator that has been responsible for creating and sustaining the bullish trend in Palatin Technologies stock.
The price action, which has been constructive in nature, consists of impulse waves and consolidation waves.
The waves highlighted in green are impulse waves, and they define the stage in a bullish trend when a stock makes a sustained move toward higher prices.
The waves highlighted in purple are consolidation waves, and they define the stage in a bullish trend when a stock corrects and refrains from advancing. These waves are very important in the development of a bullish trend because they create the necessary conditions such that, once a consolidation wave is complete, another impulse wave can follow.
The completed trading range doubles as a consolidation wave, which means that the completion of this wave suggests that an impulse wave has been initiated.
The notion of higher PTN stock prices suggested by the impulse waves is also being supported by the moving average convergence/divergence (MACD).
MACD is a very influential momentum indicator that uses the crossing of a signal line to determine whether bullish or bearish momentum is influencing the price action in a stock. Bullish momentum implies that a stock is geared toward higher prices, while bearish momentum implies that a stock is geared toward lower prices.
The reason this indicator is influential is that a stock cannot sustain a move in either direction unless the applicable momentum is supporting it, and the MACD signals on the Palatin stock chart are a testament to this notion.
In April 2017, a bullish MACD signal was generated, implying that Palatin stock was geared toward higher prices. For the next eight months, this indicator remained in bullish alignment as the stock appreciated by 137.56%.
In January 2018, a bearish MACD signal was generated and the stock price refrained from advancing. A trading range developed as a result.
The completion of the trading range on March 21 coincided with a bullish MACD signal and, together, these signals are supporting the notion that much higher Palatin Technologies stock prices are in development.
Even though the markets are under duress, there are still stocks that are poised for further gains. A completed technical price pattern and a bullish MACD signal is why I believe that Palatin Technologies stock is one of those stocks. I will maintain this view on PTN stock as long as the indications that created this view remain in bullish alignment.