Win or Lose?

Another week draws to a close and among all the talk of vaccines and lockdowns and other things, which no doubt have you thrilled and excited for the weekend, the conversation around this week’s results will either be one of celebration or commiseration. Among the trades I’ve been hearing about, one that caught my attention in particular was the solid upside move in US pharmaceutical stock PRQR which saw a whopping 62% rally this week.

Who Are PRQR?

First thing’s first, the company has nothing to do with COVID or vaccines so this is the last i’ll mention that here! PRQR Therapeutics are a research and development company for drugs used in the treatment of genetic disorders.

Clinical Trials Breakthrough

Recently the company has been working on developing a drug for Usher syndrome which is a rare disorder causing a loss of vision among some other issues. The big breakthrough for the stock this week came when the company announced positive results from the first phase of its clinical testing of its drug QR-421a. The group’s chief medical officer Aniz Girach reported that "With just a single dose, QR-421a demonstrated clinical proof of concept with benefit observed in treated eyes compared to the untreated eyes in multiple concordant measures of vision."

Bullish, With Risks

With solid results in the first phase of the trial, the group will now move ahead to begin phases two and three over the remainder of the year. If the data continues to move in the right direction, the outlook for PRQR is firmly bullish. However, it is worth noting that results around testing such as this can be very volatile and the stock is vulnerable to sharp downside moves if the data disappoints.

Wall Street Upgrade

In the meantime, however, it seems that sentiment is turning in favour of the stock with MP Securities upgrading the stock’s price target to $35 from $19 on the back of these results and it seems they aren’t the only ones; trading volume on the stock has jumped to 91 million this week, 120 times the average weekly volume for the stock.So, if you were part of that move, well done, and if not? Hey, there’s always next week!

Let’s take a look at the technicals.

Technical Views

PRQR

The spike higher in PRQR this week saw price surging above the bearish trend line from Q1 2020 highs as well as several structural levels. The rally topped out into the test of the 9.42 Feb 2020 highs. For now, the correction from that level is holding above the 8.67 level. While this region holds, the focus is on a further grind higher towards the 10.08 level next. To the downside, 7.54 is the big level to watch should the stock turn lower.

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