Is Autolus Therapeutics Setting Up for a Big Move?
A symmetrical triangle pattern has formed in the chart of Autolus Therapeutics PLC (AUTL). The stock is expected to either break through its resistance line or fall through its support...
A symmetrical triangle pattern has formed in the chart of Autolus Therapeutics PLC (AUTL). The stock is expected to either break through its resistance line or fall through its support level. Read more to learn how to be ready for a potential breakout or breakdown.
Autolus Therapeutics PLC (AUTL) is a biopharmaceutical company developing next-generation programmed T cell therapies for the treatment of cancer. The company's clinical-stage pipeline comprises five programs: AUTO1, AUTO1/22, AUTO3, AUTO4 and AUTO6.
The company recently announced a new deal with Moderna (MRNA), in which MRNA could use some of AUTL’s proprietary binders in new cancer therapies. AUTL also recently announced that its experimental CD19 cell therapy, AUTO1, achieved 100% remission in patients with relapsed indolent non-Hodgkin lymphoma in an early-stage study.
As of the most recent quarter, the company had $216 million in cash, compared to only $19 million in long-term debt. Over the past three years, sales have grown an average of 31.8% per year. However, sales are expected to fall 16.7% year over year in the current quarter.
The stock also appears very overpriced with a price-to-sales ratio of 112.85, which is well above the industry average of 12.2. AUTL was showing bearish momentum from December through May, but performance has been mixed since, as seen in the chart below.
Take a look at the 1-year chart of AUTL below with my added notations:
Chart of AUTL provided by TradingView
AUTL is consolidating within a common chart pattern known as a symmetrical triangle. A down trending resistance (red) combined with an up-trending support (green) forms the triangle pattern. Since there is no true way to know which way the stock will break, traders may wait for the breakout or breakdown before entering a trade.
A trader could enter a long position on a break above the down trending resistance with a protective stop set under the entry level. However, if the stock were to break below the trend line support, a short trade could be entered with a protective stop above the trend line.
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AUTL shares were unchanged in premarket trading Tuesday. Year-to-date, AUTL has declined -34.23%, versus a 17.56% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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