Shares of NRX Pharmaceuticals Inc. (NASDAQ: NRXP) spiked in price by over 60% on Tuesday due to positive news from the FDA related to their product Zyesami. This could be the return of their shares after a 65% fall over the past 6 months. NRXP opened almost 11% lower on Wednesday suggesting that sellers were eager to book their profits, nevertheless, this could just be a pullback before a breakout is seen.
NRXP has been moving in a strong downtrend since May and after a strong closing on Tuesday a breakout is almost here.
A Closing above $12 on Wednesday will confirm the breakout and could be the start of the stock.
A volume spurt was also seen on Tuesday which is showing that a breakout is imminent with the volume that NRXP has shown on Tuesday.
After the breakout, investors who do not want to take a risky position can wait for a re-test of the trendline.
The RSI has also shown a clear reversal on Tuesday and is showing great momentum.
The gap down on Wednesday has very low volumes which is a positive sign for investors.
Let’s take a closer look at the weekly chart of NRXP-
On Tuesday NRXP formed a bearish RSI divergence and was at an overbought zone which was hinting towards a pullback, this was proved by the gap down opening of 10.61% on Wednesday.
The gap down on Wednesday could only be a low volume pullback before a breakout over the trendline.
The first target of NRXP can be set at $25 as a strong resistance can be seen, and once $25 is taken out, a new all-time high should not be a problem for NRXP.
A long entry should only be taken once a breakout is seen as entering early could prove to be very risky.
Conclusion–
The Gap down on Wednesday could only be a pullback, and NRXP could resume its rally on Thursday again. To be on the safer side of the trade, a long entry should only be taken once a breakout is witnessed with the first target set at $25.
The post Are the shares of NRX Pharma making a comeback? A look at the charts appeared first on Invezz.
