Key point on BOT - where to?
Couple of things to unpack here, we're at a Pivotal point right now just holding the .618 Fibonacci retracement level on the recent move.
DOW Theory suggests "The secondary, or intermediate, trend represents corrections in the primary trend and usually lasts three weeks to three months. These intermediate corrections generally retrace between one-third and two-thirds of the previous trend movement and most frequently about half, or 50%, of the previous move." Currently, being at the .618 level is "two-thirds of the previous trend movement". In other words, close under .135 for consecutive days and we go to retest the recent lows.
Consider the above from Dow Theory, and look where we retraced to on the Fib - Exactly .5 or "most frequently about half, or 50%, of the previous move." again suggested we are continuing the trend downward furthermore reinforcing the importance of holding .135
Now take a look at the OBV indicator as it foretold the recent FDA non-approval dump. Clear Bearish Divergence showing weakened buying on the move up between 16 August to 19 September. To gain some trust in the indicator for readers, I've highlighted a period between 11 Oct 22, and 3 Feb 23 where price created a new low - .059 to .055 however OBV showed a clear Bullish Divergence showing 'Smart Money' were increasing their buying during that period.
Finally, continuing with OBV - take a look at the below, we have lost previous support and come back and tested it as resistance. The equivalent buying that is going on now is as low it was back in Feb-March this year when we traded between .075 and .08
Take from this what you will however as outlined in my prior post on Botanix, I don't see the stock re-rating to high-teens, low-twenties and sitting there until official FDA approval.
DOW Theory suggests "The secondary, or intermediate, trend represents corrections in the primary trend and usually lasts three weeks to three months. These intermediate corrections generally retrace between one-third and two-thirds of the previous trend movement and most frequently about half, or 50%, of the previous move." Currently, being at the .618 level is "two-thirds of the previous trend movement". In other words, close under .135 for consecutive days and we go to retest the recent lows.
Consider the above from Dow Theory, and look where we retraced to on the Fib - Exactly .5 or "most frequently about half, or 50%, of the previous move." again suggested we are continuing the trend downward furthermore reinforcing the importance of holding .135
Now take a look at the OBV indicator as it foretold the recent FDA non-approval dump. Clear Bearish Divergence showing weakened buying on the move up between 16 August to 19 September. To gain some trust in the indicator for readers, I've highlighted a period between 11 Oct 22, and 3 Feb 23 where price created a new low - .059 to .055 however OBV showed a clear Bullish Divergence showing 'Smart Money' were increasing their buying during that period.
Finally, continuing with OBV - take a look at the below, we have lost previous support and come back and tested it as resistance. The equivalent buying that is going on now is as low it was back in Feb-March this year when we traded between .075 and .08
Take from this what you will however as outlined in my prior post on Botanix, I don't see the stock re-rating to high-teens, low-twenties and sitting there until official FDA approval.
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