Redx Pharma: Triangle breakout could lead back to highs

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Redx Pharma: Triangle breakout could lead back to highs

There are few things on the stock market quite as enticing as a drug developer which reveals itself as having made significant progress. This is the position which has just been revealed at Redx Pharma (LON:REDX).

Although it has only just been announced that Redx Pharma is to make a clinical trial application for its RXC005 leukaemia treatment, it would appear that the market has been guessing that this happy state of affairs was waiting in the wings. This is said on a charting basis in the run up to the fundamental breakthrough.

What is interesting on the daily timeframe is that we have quite a few important technical triggers influencing the price action. For instance, the starting gun of the recent bullish phase can be regarded as the as yet unfilled gap to the upside through the 50 day moving average, then at 25p. It is now up to 35p and providing a barrier to progress along with a post-September triangle formation.

The view at this point is that because the stock has tried three times to clear fill the September gap and failed, we should finally be treated to the push higher after an extended consolidation. Indeed, as little as a weekly close back above the triangle / 50 day line should be enough to take this market up significantly. The favoured scenario would then be for a journey to test the 60p plus peaks from the autumn over the next 3-4 months. Only back below the gap floor at 25p would really question the recovery argument at Redx Pharma.

redx chart

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