Nuformix (NFX) - Long Trade
Updated
Nuformix PLC, formerly Levrett PLC, is a United Kingdom-based pharmaceutical development company.
Price retraced significantly from recent spike. Didn’t quite reach the 78.6% FIB which I would have liked.
Position taken at 7.8p. Following the two trading sessions which closed with dragonfly doji’s. Usually a good sign of a reversal.
Minimum 2:1 Risk/Reward trade.
STOP: 10% downside - to just below 200ma support level.
TARGET: 25% (give or take) upside - back to 10p region (50% retrace level).
Suspect recent traders who exited on the last spike will be looking for re-entry soon. Licensing news from the company also due and may attract some longer term holders (investors).
FOMO will *perhaps* gain momentum as we approach and move into the New Year.
Would have liked to have seen the daily a little more oversold.
Price retraced significantly from recent spike. Didn’t quite reach the 78.6% FIB which I would have liked.
Position taken at 7.8p. Following the two trading sessions which closed with dragonfly doji’s. Usually a good sign of a reversal.
Minimum 2:1 Risk/Reward trade.
STOP: 10% downside - to just below 200ma support level.
TARGET: 25% (give or take) upside - back to 10p region (50% retrace level).
Suspect recent traders who exited on the last spike will be looking for re-entry soon. Licensing news from the company also due and may attract some longer term holders (investors).
FOMO will *perhaps* gain momentum as we approach and move into the New Year.
Would have liked to have seen the daily a little more oversold.
Comment
I have just been asked privately if I was still in this setup after price breached the target exit level on Friday. Thought it would be worthy to cut and paste that reply here too..“The price only breached intraday? That is to say, I like to use the open/close prices on candles as confirmations. I am not an intraday trader. Levels are not absolute. Despite price moving lower during the day, the daily candle for Friday closed around the 200ma. This is likely to be a good level of support as the price hasn’t previously closed below the 200ma since April of this year.
By also waiting for the close, we have also established that today’s candle is a sort of hammer like candle too (not the best, granted). Which in itself is not a bad candle to see. Especially when it sits on support.
This is also a good time to mention this is where I often use the 4hr chart for additional clues. If you look at the 4hr chart, you will see that it is fairly oversold. You will also see that the last three candles spanning over Friday create a formation which suggest the downward pressure may be easing a tad. All around the 7p level, which is the recent placing place. As per RNS 9491U dated 25th November 2019. Which in itself will potentially be a fairly good psychological level of support.
Is this the bottom? Will we see even lower prices? Who knows. Let’s see what next week brings.”
Trade closed: target reached
Although this dropped a little below my initial target exit point, as already mentioned I continued to hold the position. Because the 50ma on the weekly provided good support.This company seams to have much to offer long term holders, but this was a shorter term position for me. I have now closed it a little short of my 25% target. Happy to take just over 20% on this one.
Good luck all.
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