Sorrento Therapeutics Is Forming Pennant Pattern: Technical Levels To Watch

Sorrento Therapeutics Inc. SRNE shares moved higher Tuesday after the company announced Phase 2 Abivertinib clinical studies have completed patient enrollment in the U.S. and Brazil. The company is expecting top-line clinical data at the end of the third quarter. The company also announced it will provide services to U.S. Naval Research to fight COVID-19.

Sorrento Therapeutics gained 2.76% Tuesday, closing at $8.93. 

Sorrento Therapeutics Daily Chart Analysis

• Shares are forming into what technical traders would call a pennant pattern. The pattern still looks to be in the early stages and may take some time before traders could see a breakout.
• The stock is trading above both the 50-day moving average (green), and the 200-day moving average (blue), indicating sentiment in the stock is likely bullish.
• Each of these moving averages may be areas where the stock finds support.

Key Sorrento Therapeutics Levels To Watch

• The pennant pattern has been forming since early July 2020, and may continue to form for months before the stock breaks out.
• The price will likely continue to be condensed between narrowing highs and lows until the stock is able to break above the pattern support or resistance and possibly see a strong move in the same direction.
• The Relative Strength Index (RSI) has been trading above 50 throughout the past few weeks and is now almost entered into the overbought area. The RSI tapped off of 70 where the overbought range starts and fell back to 58 where it sits now. The stock may see bullish moves if it can stay in the overbought range.

What’s Next For Sorrento Therapeutics?

Bullish technical traders would like to see the stock continue to trade within the pennant pattern and trade near the pattern resistance. Eventually bulls would like to see the stock break out of the pennant pattern and see a large bullish move.

Bearish technical traders would like to see the stock fall to the bottom of the pennant pattern before breaking below the pattern support. If the stock were to fall out of the bottom of the pennant, it may see a strong bearish move. Bears would also like to see the stock fall below the moving averages for a possible change of trend.