Is Reddit Favorite BioNano Genomics About To Nosedive?
BioNano Genomics (NASDAQ:BNGO) is testing an important support at the $5 level. If this support breaks, shares could make a rapid and large move lower.
There’s an old saying on Wall Street that “gaps refill." It’s true and it could happen with BioNano.
When a stock makes a large move higher in a short period of time, little to no volume trades at the price levels the stock moves through. This type of action shows up on a chart as a gap. In December, BioNano gapped up from 50 cents to $5.
Support forms when remorseful sellers decide to buy their shares back after they trade at higher prices. Because of this, the more time that a stock trades at a certain level, the greater the amount of support that will form at it.
When stocks gap through levels, like BioNano did in December, they spend little to no time trading at them. Therefore, there isn’t sufficient time for meaningful support to form.
This is why when a stock gaps up through price levels, it could fall right back through them. There won’t be enough demand, or buyers, to provide support. It could happen with BioNano.
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