There has been an interesting technical development for shares of Soligenix Inc. (NASDAQ:SNGX). If the stock breaks above its key $0.95 resistance level, it would mark its first low above a certain level in several years. This is a stock that has been a serial disappointment, however, that all might be changing as the stock breaks above a short-term downtrend and stays in its first uptrend in years.
While it's too early to say if this is a long-term bottom, we are certainly looking at the potential for a quick pop as the bulls may finally be circling back to this name after leaving it for dead for a long time.
As mentioned, the key to this becoming a trade idea is a successful breakout of the $0.95 resistance level. If it can do that, further resistance appears up at $1.03, $1.10, $1.16, $1.23, $1.30 followed by the high in late-July of $1.39. Because the stock's multi-year downtrend is technically still in play, we won’t make an aggressive call with this trade, opting for a price target at $1.09.
As for support, we would watch the $0.90 level to act as dynamic support (200-day moving average) and static support. Below that, static support comes in at $0.85. This level is also where the upward trend line is currently. Below that, further support sits at $0.78. We would start getting concerned about the stocks trajectory if the $0.90 level is breached to the downside in a meaningful way, so we’d look to place a stop loss at $0.89.
As discussed, we need to see the $0.95 level broken with conviction to believe that this is a stock worth entering. With that, we would only enter the trade upon a break and close above $0.96, specifically on strong volume. Based on a $0.96 entry level, our upside potential looks to be 13.5% while our downside risk is limited to 7.3%.
