Licopine Inc LPCN shares are trading higher by $0.06 (2 percent) at $5.47 in Monday's session. Although the issue has risen 40 percent over the past two weeks, the double dose of good news on Friday has failed to nudge the issue over the key $6 level.
Here are reasons why $6 is turing out to be a key technical level. First of all, $6.17 was the low on June 28, the day before it swooned to $3.10. The catalyst for that decline was a response letter from the FDA, noting deficiencies in a dosing algorithm on one of its labels.
Therefore, all the buyers trapped in the issue from that day forward are looking to trim their losses as the issue traded down to $2.51 on June 29 before staging a slow arduous rebound.
Also, buyers who purchased the issue on the cheap may be booking some profits.
The significance of the $6 level was evident on Friday as the issue peaked at $5.90 and backed off to close the session at $5.41. Today's higher open was snuffed immediately ahead of that high at $5.75.
For now, long-term investors may want to watch Friday's close of $5.41, as that represents the highest close of the recent rally. Its current intra-day low rests at $5.36, which is only a nickel from Friday's close.
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