This Biotech Stock Could See A Big Move If It Breaks Out Of The Pennant It's Forming

Humanigen Inc. HGEN shares made gains Wednesday 

following the publication of results from a Phase 3 randomized double-blind placebo-controlled study.

The study demonstrated the efficacy and safely of the company's lenzilumab in hospitalized COVID-19 patients. Lenzilumab was found to significantly improve survival without ventilation in hospitalized patients with COVID-19.

Humanigen Daily Chart Analysis

• Shares of Humanigen are forming into what technical traders call a pennant pattern. The pennant pattern is very large, originating in July 2020. It is thought by traders that the bigger the pattern is, the bigger the breakout will be.
• The stock is trading above both the 50-day moving average (green), as well as the 200-day moving average (blue), indicating sentiment in the stock has been bearish.
• These moving averages may both hold as a resistance level in the future.

Key Humanigen Levels To Watch

• Humanigen has been forming into a pennant pattern on the daily chart and is looking to see a potential breakout in the coming weeks.
• The pennant pattern forms as the price is condensed between narrowing highs and lows. A strong move in either direction typically follows, and the stock continues trending in the same direction as the breakout.
• Humanigen may not break the pattern for weeks or months, but when the pattern is broken it may see a large move in the same direction as the breakout considering the size of the pennant.  

What’s Next For Humanigen? 

Bullish technical traders would like to see the stock continue to move sideways and creep toward the top resistance line of the pennant before breaking out and possibly seeing a large move.

Bearish technical traders would like to see the stock start hanging around the support lines of the pattern and eventually break below the support line before potentially seeing a large move.

Humanigen is a holding in the Direxion Daily S&P Biotech Bull 3x Shares ETF LABU.