Technical Pressure Could Drag Biotech Lower

MRTX has run into a historically bearish trendline on the charts

Deputy Editor
Feb 13, 2023 at 1:24 PM
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The shares of Mirati Therapeutics Inc (NASDAQ:MRTX) have been pulling back on the charts this month, after running into the $55 level. Plus, the equity just came within one standard deviation of its 50-day moving average, which has had bearish implications in the past. 

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, MRTX has seen six similar signals over the past three years. The stock was lower one month later half of the time, averaging an 8.5% loss. From its current perch at $48.54, a setback such as this would place Mirati Therapeutics stock just above the $44 level. 

MRTX Feb13

It's also worth noting that though shorts have been covering their bets, with short interest down 10.3% over the past two-week reporting period, the stock has still moved lower on the charts. This indicates further technical weakness in the shares. 

A round of bear notes could provide further headwinds as well. Of the 16 analysts in coverage, eight carry a "buy" or better rating on MRTX, while the 12-month consensus price target of $70.88 is a hefty premium to current levels. 

 

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