PBYI Stock: Setting up to Stage an Advance
Puma Biotechnology Inc (NYSE:PBYI) stock staged quite an advance in May 2017 as investors’ concerns about poor earnings results were cast away after some positive news. The U.S. Food and Drug Administration (FDA) approved the company’s “Neratinib” drug for the treatment of breast cancer.
From trough to peak, PBYI stock ran up to the tune of 224.52% before the share price finally decided to take a breather. The timing of this surge toward higher prices could not have come a better time, because the entire biotechnology sector staged an advance that helped fuel this incredible return in Puma Biotechnology stock.
I have the bullish inclination to believe that biotechnology stocks as a group are now ready to stage an advance, which is the same inclination that has me really excited about the prospects for Puma Biotechnology stock.
My beliefs are centered on the method of analysis I use to generate a view on a potential investment. For those not familiar with my work, I base my judgments on an investment by analyzing the fine workings of the company’s stock chart.
Known as technical analysis, this method is predicted on using historical price and volume data to forecast what the future may bring. It has been instrumental in producing investment strategies that are both systematic and strategic. I have spent the last two decades perfecting my craft in this method.
The following Puma Biotechnology stock chart illustrates the developments that followed the incredible surge in the PBYI stock price.
Chart courtesy of StockCharts.com
This PBYI stock chart illustrates the phenomenal move that investors experienced in the month of May when the stock price jumped a great deal in a short amount of time.
This surge in price caused a golden cross pattern to generate. This bullish indication, which is highlighted on the Puma Biotechnology stock chart, is created when the faster 50-day moving average (highlighted in blue) crosses above the slower 200-day moving average (highlighted in red). This indicator captures the transition when an investment turns and starts to stage an advance. In the simplest terms, a golden cross is used to identify that a bull market is in development.
The question remains: when exactly is such a move toward higher prices likely to develop?
The moving average convergence/divergence (MACD) indicator in the lower panel of the chart has a propensity to distinguish when a wave is set to develop (and which wave it would be) and, therefore, it is great tool to help time the next advance.
MACD is used to distinguish between bullish and bearish momentum. In order to stage an advance, which creates an impulse wave, bullish momentum is required. The bullish MACD cross that was generated in May is an excellent example. In June, a bearish MACD cross was generated, indicating that the impulse wave is complete and that a consolation wave was in development.
The MACD indicator is currently in bearish alignment as the consolidation wave continues to develop. If an impulse wave is set to develop, PBYI stock will exit the consolidation wave in an upward direction, which will coincide with a bullish MACD cross. This is the moment I am eagerly awaiting.
Bottom Line on Puma Biotechnology
Puma Biotechnology stock staged an impressive advance in May, but I am inclined to believe that this advance was just the beginning of a much larger run. This inclination is based on the PBYI stock chart, which is suggesting that another explosive move is in the works.