Adaptive Biotechnologies Corporation [NASDAQ: ADPT] goes parabolic on its first day of trading. A number of companies have gone public in the last few months, and a lot of them have performed exceptionally well. It’s an indicator that, there is a huge investor appetite for these new listings. The latest of them to perform well is ADPT. This Biotech firm priced its IPO around $20 and on its first day of trading, it shot up by 101% to close Thursday trading at $40.30. However, it should be noted that ADPT opened for trading on the stock market at $39.01 and pulled all the way back to a low of $36.21 yesterday, before rebounding and closing at $40.30. So technically the stock did not really go parabolic in the eyes of retail investors because the stock opened for trading at $39.01. The investors that got in on the IPO around $20 did however do very well being that the stock is now up about 100%.
What’s interesting about this company, is that ADPT says it has the technology to read and translate the genetic code of the adaptive immune system. This can help it to develop treatment for diseases such as cancer and deal effectively with infectious diseases. Considering how big of a deal these treatments are, it mans that this company could experience significant revenue growth going into the future. This explains the strong bullish sentiment around it.
In the short-term, ADPT’s price action paints a relatively bullish picture since it did close the trading yesterday near the day high. However, it has been holding steady above $36.21 which is now a key support level in the day since this was yesterdays low price. If ADPT opens up today bullish it could trade in the green for the day and if it opens above yesterdays high of $40.62 this would be another bullish indicator.
Besides, its technicals and fundamentals, ADPT’s price action could be supported by the increased appetite for Biotech stocks. There has been significant activity in Biotech with multi-billion dollar mergers and acquisitions happening, in the last couple of months. With this spotlight, a biotech IPO with a strong value proposition, such as ADPT, is likely to keep exciting the market, especially after a parabolic first day of trading.
Remember my saying, “Focus on the Charts and not the Stocks.” The chart tells the true picture and story of the underlining company!