Quick Take Technical Analysis: Cassava Sciences, Inc

Cassava Sciences, Inc SAVA fell over 5% on Tuesday, amid a large overall market pullback that saw the SPDR S&P 500 SPY decline about 1.8%.

• Cassava Sciences settled into a bear flag pattern on the daily chart two days after reaching a high of $100 on Nov. 4. On Tuesday, the stock broke down bearishly from the pattern but on low volume, which indicates the pattern may not have been recognized.
• Traders will want to watch for increasing bearish volume on Wednesday to see if Cassava Sciences receives follow-through on the break from the pattern.
• On Tuesday Cassava Sciences held above and wicked from the $49.55 level. Paired with similar price action on Nov. 23, the stock may have printed bullish tweezer bottoms at the level.
• The eight-day exponential moving average (EMA) is acting as resistance. Bullish traders may want to wait for the EMA to be recaptured for confidence the stock is headed higher.
• Cassava Sciences is currently trading in an uptrend due to the fact that it has not yet made a lower low under the $49.55 level. For the uptrend to continue Cassava Sciences will need to make a higher high above the Nov. 26 high of $62.07.
• The stock has resistance above at $57.20 and $62.07 and support below at $49.55 and $36.35.