FLGT Big heads up

I have been watching FLGT for months now! I am currently holding some position as well as swinging between the levels. It all started with issuing a put option when the stock was at 130 back in early Feb and it's amazing earning report that picked my interest in this stock. Most importantly it is very interesting how FLGT behaves irrelevant to the market and its sector from time to time.

This is my third post about FLGT. So far, this stock is bouncing in a giant base between 80-120 dollars, since its significant decline from all time high of 180.00. While many participants lost hope in its recovery, past few days we saw significant interest in FLGT specially it was bought heavily at 80s level.

However, there are two big bumps ahead for FLGT:

1. Today FLGT failed to break out of its down trend channel. Tomorrow is very critical as if FLGT bounces down from 90 level it will go back to high 70 levels. If it breaks out of this channel then we are on our way to mid 90 levels on a healthy trend.

2. There is significant open interest at 95 strike prices put options. If by Friday the stock finishes above this level, the healthy trend will continue as issuers of the put may buy the shares to ride the trend up. However, if FLGT closes below 95 more 100K extra shares will be bought by the issuers of the options at the market price. That extra 100K shares can be decisive in on coming week as if the downtrend continues many may exit their position to minimize their risk! On the other hand, if the up trend continues many will hold their position and reduce the supply causing the stock to spike.

Therefore 95 resistance level is very critical. Not to mention there is extra attention to FLGT. We definitively going to see some volatility in the stock price in next few days!

FLGT has strong fundamentals and relatively weak technicals at this point which are turning around however, it is too early to be optimistic on FLGT technicals! To my humble experience stocks with good fundamentals and bad not so healthy techincals take much longer to become fruitful as they attract investors not traders!


Please leave me comments and feedback and feel free to ask questions.

Comment:

In the morning we saw downward bounce from the upper band of the channel however, it was short lived and bulls got in control. If the momentum continues you like this, we may see a breakout Friday or Monday. However, we are officially still in a down trend in FLGT. Sustained price above 95 is a clear change in trend and very bulish condition for FLGT!

Comment:

The technical for this stock are not much useful anymore: FLGT despite breaking out of its downward trend it failed to initiate a healthy upward trend. Thanks to heavy short positions opened yesterday. It is a good news and bad news. Good news is that it will stop FLGT to have drastic down fall, because shorts need to buy back to close their positions. It is bad because it really prevented FLGT from breaking out of 90 level and gong back up to 100. I am holding on to my shares and is not adding significantly unless we there is reversal in RSI. Also I am holding on to these shares for few month if not years. In other words I am trading FLGT on back of its fundamental and at this point do not see any radical immediate gains. Is FLGT on its way to 10-20 dollars a share? It is extremely unlikely as FLGT is a different animal now than what it was before pandemic. It went from cash strapped to cash surplus company. What they do with all this cash determines the faith of FLGT for next few years. However, I have faith in the management. Would this stock go back to 180-200 level. Not any time soon. Unless it becomes hot topic of traders. The risk appetite in the market is much lower than last year. Investors are much more cautious. Therefore they won't go "All in" on to growth stock. As a result FLGT needs to take its time to mature! However, if we have another great earning, I can see the price reaching to mid 90 to 100 levels.

Comment:

FLGT had another great earning report but why does it struggle so much? FLGT has been heavily shorted. So much so that days to cover increased from around 2 to more than 5 days. The drive from low 80s to low 70s past few days was mostly fueled by short sellers. Someone might ask why a great stock like FLGT gets shorted. Average Joe is praising the stock on social media. There is not a single short strategy on Trading View Ideas. What is going on? Well if retail traders are not driving the price down then it has to do with hedge funds and big money. One of the main reason they short a low to mid cap stock like FLGT is is that with relatively smaller capital they can significantly move the stock. Pushing many people out of their position and scoop it back at lower prices. Someone who can short 200,000 shares of FLGT at least playing with more than a million dollar here. These hedge funds and big money managers are not idiots. They do this with a strategy. That renews my previous strategy, there is not much gain short term in FLGT however, it is at good price for buy and hold!

Comment:

I haven't updated this trade in few weeks, honestly technically nothing much has been going with FLGT however, I was looking through short interest data and something peculiar caught my attention: FLGT days to cover is unprecedented at 7.797937, another set of data should be out soon. This tells me that may short squeeze get triggered in FLGT it will be massive. So far shorts really trying hard to keep the price blow 75. They are doubling down on daily bases and random volume spike with no significant price action is highly evident of this hypothesis. However, how much longer they can sustain their positions? I don't know. Sofar any buyers showing very good apatite for FLGT around 70 dollars. It is very interesting to see what happens to FLGT in upcoming days. Will short gets their hands burned or will they drive the price of the stock to 50 level we shall see. Side note: there is a very nasty stigmatization against short sellers on social media. I would like to make it clear that I have nothing against short sellers. In contrary I believe the existence of short sellers is essential to the market. They provide liquidity and opportunity for short squeeze also they build a safety net against massive down fall. Remember holding short position is not sustainable as it costs money on daily bases!