Biotech stocks Day One Biopharmaceutical (DAWN) and Karuna Therapeutics (KRTX) are both setting up extremely well in high-tight flag patterns. While both of these companies have terrible fundamentals, they are both sporting extremely strong charts. Although I'd love to see a history of earnings and sales growth, I've learned to never argue with the tape, and both of these stocks are acting extremely well.
Over the past three months, DAWN has risen from around $7 to a high of $28.35. Since then, it has held up relatively well with support near the 23-day ema. The heavy volume accumulation in June followed by the constructive action since then is a sign of institutional support. I will be monitoring DAWN in the coming weeks for a potential entry point.
KRTX has also demonstrated fantastic action this summer. The massive volume gap up on August 8 is a blatant sign of institutions coming in to buy the stock. Since then, Karuna has been trading in a relatively tight consolidation, another bullish indication. I will be looking to purchase KRTX should it clear recent resistance.
Risk right. Sit tight.
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