Trading EBIO - New 55 Day High with 200% Vol

Date: 2018/04/14

One of the filter I used to scan for play is my so called "New 55 Day High with 200% Volume Spike" using stockfetcher.com. Yesterday, around 10:00AM the scan had given me the following result. Although if I have to recreate the result at that time frame, it won't show up anymore exactly as it had presented me. Anyways, the result is the following:

Of the charts above, what caught my attention was the symmetrical triangle formation of EBIO forming a VCP (Volatility Contraction Pattern) breakout which Mark Minervini had been teaching. This is how it looks closely. It had broken out the $1.00 price range then it retested the $1.00 mark as the new support. From this support it popped higher with a huge volume of more than 13.2M shares.

The volume we talked about is so high compared to all the volumes it had since December of 2016. The only high volume before was December of 2017 which was closed to 10M shares. Something is going on with this company. Why there is this surge of volume? Yesterday EBIO announced that it will be sharing the result of the Preliminary Data from Phase 3 VISTA Trial in Bladder Cancer to Be Presented in a Plenary Session at American Urological Association Annual Meeting. Stephen Hurly, president and chief executive officer of Eleven Biotherapeutics said that, “Vicinium has demonstrated that it is a well-tolerated and active agent in patients with BCG unresponsive NMIBC in studies to-date. We are excited to be presenting the first preliminary data from our Phase 3 VISTA trial of Vicinium for patients with NMIBC at this year’s AUA meeting. During our plenary presentation, we will share initial efficacy findings and data supporting the favorable safety we have observed so far with Vicinium. We believe Vicinium holds tremendous potential as a treatment for bladder cancer, and we look forward to sharing these and additional data later in the year.” There is positive aura for an FDA approval of their vicinium product for bladder cancer patients.

How I defined my Entry, Stop Loss and Target?

• The Neckline of the hammer candles  near the 2 highest volumes before the 13M shares volume is $1.16. I set my stop loss at $1.15. If the trade does not materialize after I enter and falls below this limit then I am out.
• The top of the hammer candles near the 2 highest volumes before the 13M shares volume is $1.18. I set my Entry at $1.20 to $1.25. My entry of 1.24 got triggered.
• Basing previous High and Low the Height is $0.56. If we add this one to the New Low of 0.95, our estimated target is $1.51 or $1.5. Set a sell order at $1.45 or $1.47.

Setting up a Notification for more precise entry:

• On the 5minute chart I saw that the $1.20 base line was hit already in the morning I figured out that soon that same base line will be retested. So I placed a notification on my trading account software of Questrade to send me a text message, that if the price falls below or remains equal to this $1.20 then I have to look at the chart. It got triggered but I did not enter the trade because there was no sufficient volume against the sellers.  
• So I placed another notification to tell me that if it hits $1.22 and higher then I have to check the chart again. It was triggered and the green volume was higher than the previous red volume. So I entered the trade at $1.24
• The stock kept hitting the $1.27 price level and dwindled to $1.25 at closing.

How the stock unfolded after the entry.

Before the opening the stock fell back to $1.20 and even to $1.18 but held up there and rebounded to $1.32 which went back down to $1.18 around 10:00AM. From there it went as high as $1.38 and pulled back to $1.29 then closed above the previous day's high (Green line) of $1.38 to $1.42.

There is one stopping volume that the Market Maker is showing us. There is one sign of huge sell out (wide heavy red candle with a huge volume) around 3:10PM. Youcan also see this heavy red volume on the rise as I scribed it with the red dotted line.