Cord Blood America (CBAI) had a run-up last week and it appears most of the bulls are still holding even while the price falls. As long as this continues, we can likely expect another big run-up sometime soon and likely higher than the recent run-up as more buyers enter.
10-day 15 min Chart
Analysis: We are seeing a bullish divergence between stock price and both the OBV and A/D lines. The Stochastics/RSI tell me we could see a small pullback for better entry points but the lack of selling right now means it may not go down much further. The CMF is looking bullish indicating bulls are likely still in control contrary to the price decline.
1-month Chart
Analysis: We are also seeing a bullish divergence showing on the A/D line per the 1-month chart. The ADX line is still in a bullish cycle but, the MACD is at make or break levels. We need a strong volume green day soon to keep the MACD from turning bearish on us. The concern here is that the MACD could be the first faltering indicator to be concerned about that makes another run-up take longer than expected. The Stochastics are nearing areas that continued weakness in the stock is likely to be met with some support indicating favorable upside risk/reward is likely.
Overall, the pullback from the run-up has happened on low volume compared to the large up-days indicating most bulls are holders. This confirms some of the bullish divergences.
Lastly, at the current price, a Doji has formed and after a downtrend, that’s an indicator of a trend change that typically needs confirmation the next day but, is possibly a good area to nibble today and add aggressively on confirmation tomorrow or the next day.
Outlook: Many times, the last 15 minutes are good tells on whether something bullish or bearish is going to happen the next day If volume significantly increases and CBAI goes green, expect a PR in the morning or some type of bullish activity. If a sell-off happens in the last 15 minutes, expect some type of red early on the next day as a general rule of thumb.
As always, do your own homework to see if you agree. Good luck out there.
Mike
At the time of publication, Kudrna was Long CBAI but positions may change at any time.
Note: Penny stocks are a different breed than any big board stock. Ensure these types of stocks fit your risk tolerance levels before jumping in.
