SANA - two scenarios to evaluate

Feb 8

SANA is offering two potential scenarios. The first is a breakout of a descending trendline after a lengthy consolidation. These are some of my favorite patterns to trade.


I'd look to take profits in 3 stages that start with the fib resistance areas and recent highs, and end with anticipation of resistance at the volume weighted average anchored to IPO (purple). I like a tighter stop for the first scenario (~5.70) since biotechs are risky and we're in a month that has a history of seasonal weakness.


The second scenario is the potential would be a breakout of a broadening pattern that formed between May and October 2023. Since Jan 10 2024 only wicked through, we'll look for another test and overhead resistance ~7.20 prior to breakout. I will enter on breakout since breakouts from broadening patterns may not retest support. Profit taking would take place at measured ranges from the pattern and key fib levels.

Note that the technical projection exceeds 12 month consensus price targets. We also have earnings in March which could be a positive or negative catalyst. A move below ~5.45 would require a new analysis.

Feb 8

Note

Update:
I just saw this news. Going yo need to monitor price for a couple of days to evaluate the impact.

"Sana Biotechnology (NASDAQ:SANA) priced an upsized public offering of ~17.27M shares at a price to the public of $5.50 per share; pre-funded warrants to purchase ~12.72M shares at a price to the public of $5.4999 per pre-funded warrant.
Underwriters have a 30-day option to purchase up to an additional 4.5M shares.
The gross proceeds from the offering are expected to be ~165M. The offering is expected to close on or about February 12, 2024. The stock price is down 5.1% on Thursday during pre-market. "