Friday saw an unprecedented surge in the stock of Geron Corporation (NASDAQ:GERN), with shares ending the day up a staggering 92%. This surge, marking a historic milestone for the company, was ignited by a momentous announcement earlier in the day.
An FDA advisory committee’s resounding endorsement of Geron’s lead asset, Imetelstat, sent shockwaves through the market, propelling the stock to new heights.
Imetelstat, positioned as a potential breakthrough in the treatment landscape, received a commendation for its application as a late-line therapy for transfusion-dependent anemia in myelodysplastic syndromes (MDS).
The committee’s near-unanimous support for Imetelstat’s benefit/risk profile instilled a sense of optimism among investors, leading to a flurry of activity in Geron’s stock. Notably, analysts at Needham responded by raising their price target on Geron from $4 to $5, echoing the sentiment of confidence in Imetelstat’s potential. But can the stock reach $5 soon? Let’s find out
IPOed in ’96: Peaks and valleys of market activityThe journey of Geron in the stock market, since its IPO in 1996, resembles a rollercoaster ride, full of peaks and valleys. Unlike some quick-buck biotech companies that pop up overnight, Geron was established in 1990, laying a solid foundation before going public.
In the heady days of the dot-com boom, Geron’s stock soared to dizzying heights, surpassing $70. Investors were swept up in the frenzy of technological optimism. However, the euphoria was short-lived as the stock plummeted in the subsequent months, wiping out all gains.
Despite the setback, Geron staged a comeback in 2003, with its stock climbing to around $16. Yet, this resurgence was followed by a prolonged downtrend that persisted for over a decade. The company faced challenges and obstacles that kept its stock on a downward trajectory.
Since 2011, Geron’s stock has displayed volatility, fluctuating within a wide range of $1 to $7. This stability within a certain price range suggests a period of consolidation and uncertainty in the market sentiment towards the company. For Geron to signal a shift towards bullish territory, it would need to break out of this range convincingly, ideally surpassing the $7 mark and sustaining that momentum.
Navigating Geron’s momentum: Strategies for bulls and bearsThere has been a significant shift in momentum for Geron, especially noticeable in the daily charts following Friday’s close. While the 100-200-day moving average crossover has not yet occurred, many short-term indicators are signaling positive trends for the stock.
For those bullish investors who are comfortable with higher risk, there’s an opportunity to consider going long on the stock at its current levels. It’s advisable to set a stop-loss a few cents below the $2 mark, which has historically served as a strong support level for Geron over several weeks.
Anticipate encountering the first resistance around the $5.40 mark, representing a 61.8% Fibonacci channel retracement from a previous swing high at $7.
However, for the more cautious bulls, it might be wise to wait for the 100-200-day moving average crossover before taking action. If the stock manages to break through the $7 barrier by that point, it would provide further confirmation of its bullish momentum.
Considering the significant rise in Geron’s stock price on Friday, bears should exercise caution. Yet, if the stock fails to surpass the $7 barrier despite its momentum, a conservative approach for bearish traders could involve initiating a trade with a reduced position size, with a stop-loss set a few cents above $7.
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