Sorrento Therapeutics Looks Like It May Have Broken Out Of A Falling Wedge Pattern

Sorrento Therapeutics Inc. SRNE shares are trading higher Wednesday after the company announced it completed an acquisition of ACEA Therapeutics.  The merger was completed June 1, and ACEA became a wholly owned subsidiary of Sorrento.

Sorrento also reported its COVID-19 virus detection test was added to the Mexican government list of approved rapid antigen tests.

Sorrento Therapeutics was up 10.60% at $8.45 at last check.

Sorrento Therapeutics Daily Chart Analysis:

• Shares have been falling the past few months and are trading in what technical traders may call a falling wedge pattern.
• The stock is trading above the 50-day moving average (green), and trading below the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may hold as an area of support, while the 200-day moving average may hold as an area of resistance.

Key Levels To Watch:

• Sorrento Therapeutics has been falling the past couple of months and may have broken out of a falling wedge pattern.
• This bullish reversal pattern happens after the stock makes a large run up and starts pulling back. The slope of the line connecting the highs is much steeper than the line connecting the lows.
• A break above resistance could let the stock move higher, while a break below resistance may hint that the stock is not done falling.

What’s Next?

Bullish technical traders would like to see the stock consolidate for a time before the stock may see another move. Bulls want to see the stock hold the gains it made as it consolidates.

Bearish technical traders would like to see the stock fall back to the area it was trading at near the point of the wedge. If the price can fall back below the moving averages, sentiment may turn bearish and it could be the start of a trend change.