Tonix Pharmaceuticals Holding Corp. (NASDAQ:TNXP) shares are rallying higher Thursday after the company announced the FDA has granted Orphan-Drug Designation for TNX-2900 for the treatment of Prader-Willi syndrome.
The co-exclusive license allows Tonix to expand its intranasal potentiated oxytocin development program to a new indication.
Tonix Pharmaceuticals was up 37.31% at 26 cents Thursday afternoon.
Tonix Pharmaceuticals Daily Chart Analysis
- The stock was able to cross resistance in what traders call a falling wedge pattern. This pattern can be seen by the falling highs and lows, with highs falling at a steeper rate than the lows. The falling wedge pattern is known to be a bullish reversal pattern if the stock can cross above the pattern’s resistance level and can hold above the level for a time and begin to form higher lows.
- The stock crossed above the 50-day moving average (green) Thursday but trades below the 200-day moving average (blue). This indicates the stock is beginning to see some consolidation. The 50-day moving average may hold as an area of support, while the 200-day moving average may act as resistance.
- The Relative Strength Index (RSI) flew higher Thursday and now sits at 65. This shows that after the announcement, many buyers poured into the stock and now there is more buying pressure than selling pressure. If the RSI can hold above the middle line, the stock may see continued bullish momentum.
What’s Next For Tonix Pharmaceuticals?
The penny stock flew after the announcement and has broken long-term resistance. This could be the beginning of a bullish trend, but the stock may also see a strong downward move in the next few days, as a 40% move or greater likely leads to some cooling off.
Bullish traders want to see the stock find a bottom and start to form some higher lows. Bulls should be careful before entering, as the candle from today has a very long top wick, indicating that buyers pushed the stock up and then sellers were able to push it all the way back down to open, also known as a shooting star candle.
Bearish traders are looking to see the stock fall back below the resistance and the 50-day moving average.
