Timing is everything. If you don't believe it, just take a look at Delcath Systems, Inc. (NASDAQ:DCTH). Three weeks ago was a great time to buy it. Two weeks ago was a miserable time to buy it. Why's that? Because three weeks ago, DCTH was trading at $1.63 and on its way much higher. Then two weeks ago, the stock was topping out at $2.19 and getting ready to tumble again. Sure enough, it was trading as low as $1.73 late last week, giving the bulk of the gain back. Traders who knew when to get in and out of Delcath did very well. Traders who didn't advantageously time their entry or exit have done poorly, and/or been driven nuts. Either way, we're seeing some new timing clues materialize right now that traders may want heed.
If the ticker rings a bell, it might be because yours truly was actually bullish on DCTH back on March 7th, and bullish on it as far back as February 4th. Shares were trading at $1.61 back in early February, and as I noted then, a modest move above $1.64 could spark a strong breakout move. Sure enough....
Nothing lasts forever, however, as we now know. On the other hand, pullbacks don't last forever either, and Delcath Systems is acting like the pullback is coming to a close, and the bulls are starting to test the waters again.
Take a closer look at that chart of DCTH. Specifically, take a look at where the lows have been made on three of the past four sessions. We've seen shares brush the 200-day moving average line (green) three out of the last four days, and push up and off that line all three times. It matters, because the 200-day line is a major technical line in the sand, even if only for psychological ones. It's a hint that the buyers are looking for any excuse to start wading in again.
Underscoring the brewing rebound effort is the volume trend. The buying volume was growing on the way up in early March, but when Delcath Systems, Inc. was pulling back in mid-March, on modest volume. Yesterday's advance was once again a higher-volume event.
Bottom line? It may not be a high-brow analysis, but it's still a reality... the over-reaction rally from early March has been unwound, and the DCTH bulls are regrouping again. This time around, though, they're restarting at a much more sustainable pace.
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