GLPG high R:R speculative play not for the faint-hearted
Updated
Conclusion
If current retracement levels hold and subsequently break above 74, bull case targeting 400+ is in play.
First indication of upside would be recovering 60.
Technical
Nominally dropped over 80% sinds the wave 3 top in 2020, while volume profile suggests uphill battle toward 60 is tough.
But putting it in a logarithmic perspective, the wave 4 retrace seems more reasonable, currently right between 0.618 and 0.5 long term fibs (pink).
The daily RSI is making higher highs and higher lows, looking for confirmation in the weekly.
Immediate bull case considered broken under circle b of 3, while taking out volume profile POC and top circle a of 3 favors bullish interpretation.
Fundamental
They have more cash on balance then market cap, which means investors value their ongoing programs below zero.
Surely research costs money so the cash holding is a moving target, but there is no need to dilute current shareholders for the next few years.
Emotional
Founder-CEO got blamed for not yielding results in the US, although IMHO entrepreneur who takes risks (w/o costing the society a lot) should be praised instead.
His decision to step down causing a pop in the share price is not what he deserves.
Not to mention that Filgotinib did get approval from the EU, which should help to slow down the cash burn a little.
Hopium is the ongoing programs produce better result, and/or Filgo eventually gets approved in the states.
Disclosure
Already long shares at 50, albeit a tiny qty for observation purpose only, stop under 35.
Will long calls if breakout confirm.
If current retracement levels hold and subsequently break above 74, bull case targeting 400+ is in play.
First indication of upside would be recovering 60.
Technical
Nominally dropped over 80% sinds the wave 3 top in 2020, while volume profile suggests uphill battle toward 60 is tough.
But putting it in a logarithmic perspective, the wave 4 retrace seems more reasonable, currently right between 0.618 and 0.5 long term fibs (pink).
The daily RSI is making higher highs and higher lows, looking for confirmation in the weekly.
Immediate bull case considered broken under circle b of 3, while taking out volume profile POC and top circle a of 3 favors bullish interpretation.
Fundamental
They have more cash on balance then market cap, which means investors value their ongoing programs below zero.
Surely research costs money so the cash holding is a moving target, but there is no need to dilute current shareholders for the next few years.
Emotional
Founder-CEO got blamed for not yielding results in the US, although IMHO entrepreneur who takes risks (w/o costing the society a lot) should be praised instead.
His decision to step down causing a pop in the share price is not what he deserves.
Not to mention that Filgotinib did get approval from the EU, which should help to slow down the cash burn a little.
Hopium is the ongoing programs produce better result, and/or Filgo eventually gets approved in the states.
Disclosure
Already long shares at 50, albeit a tiny qty for observation purpose only, stop under 35.
Will long calls if breakout confirm.
Note
.Forgot to mention, cash is trash in times of QE, but the Fed is expected to raise rate and the ECB might eventually follows. In that case, being debt free will be a plus.
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On the other hand from the EU perspective, the US medical system is broken and need to be fixed. Meaning biotech and pharma might potentially make less profit in the future under a pro-regulation administration.
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But first thing first, price should not go much lower to retain upside potential.
Note
Nicely up a few % sinds the Dec low, potentially 5 waves up structure. The correction after the curent bounce is important to watch.So far so good for the speculative long position, need more to proof long term bottom is in, being able to recover and hold at 60 will be a first bullish signal.
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