Infinity Pharmaceuticals (INFI) Stock Chart Review

As requested by a Trendy Stock Charts member through email, let’s do an Infinity Pharmaceuticals (INFI) stock chart review. This is a quick synopsis of the company per the member:

They are a very small co. focused on small molecule treatment for oncology, Last year or so they partnered with AbbiVie for a promising drug “Duvelisib”  but it collapsed after some disappointing results and when AbbiVie pulled out.

Now they have a new one “IPI-549” and partnered with Bristol-Meyers Squibb. The compound is for solid tumors who become resistant to immune therapy? Phase one sounds promising. That is INFI in a nutshell.

If the company sounds interesting to you, then check out their official website here.

Well, let’s take a look at some charts for this low priced bio-tech and see if there are any trade set-ups developing.

INFI – 20 Year Monthly Chart

The one risk for low priced stocks is when they need to raise capital. Because of the low share price, they tend to have to give away the farm if they become crunched for cash (see Sirius XM Holdings white knight loan from John Malone as a brutal example).

With that being said, this first chart for Infinity Pharmaceutical’s (INFI) is a 20 year monthly candlestick chart to see what price levels its share price has traveled to in that time span.

A Quick Peek at a 20 Year Monthly Candlestick Chart for Infinity Pharmaceuticals (INFI)

This 20 year chart actually has about 17 years of activity. Since there are only 17 years of activity on a 20 year chart, I assume that INFI became a public company in July 2000.

I did not place any longer-term trendlines or other charting tools on the above chart as it is not yet feasible. I do not see any need to build any long-term expectations yet based on this chart. Let’s review some shorter-term charts rather than longer-term.

INFI – Moving Averages

This next chart is a 1 year daily candlestick chart to analyze Infinity Pharmaceutical’s (INFI) from a moving average perspective. It appears that over the previous 3 months INFI was trying to start a new uptrend after being in a downtrend for years.

INFI’s share price just recently developed a Golden Cross pattern, a bullish signal indicating that INFI’s downtrend is probably over, now its just time for a re-test of the bottom.

Analyzing a 1 Year Daily Candlestick Infinity Pharmaceuticals (INFI) Stock Chart Using Moving Averages

The 200 Day moving average line currently resides at the $1.78 price level. After breaking back above a 200 Day moving average, the share price tends to retrace and re-test the 200 Day moving average support.[s2If !current_user_can(access_s2member_level1)]….

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I look at some pullback areas to begin building a position in the stock for both the shorter and longer-term. I also calculate some upside price targets for this risky biotech stock.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] The 1st pullback to the 200 Day moving average after the development of a Golden Cross pattern is a trade set-up that has a high probability of success. Whether or not the 200 Day moving average line holds as support is the main question.

Let’s review the same chart using a few other technical analysis methods and see what support levels those methods calculate.

INFI – Fibonacci Charting Tools

This is the same 1 year daily candlestick chart where I’ve used 2 different Fibonacci charting tools to calculate the downside pullback areas for INFI’s share price.

The first tool is a Fibonacci Retracement Tool, the black tool. A pullback usually retraces 61.8% of the previous uptrend, especially a new uptrend. A new uptrend also has the risk of re-testing the previous bottom it set.

The second tool is a Fibonacci Extension Tool, the red tool. By breaking below the 100% red Target Line, INFI’s share price is indicating lower prices still. Look for a possible reversal closer to the red 161.8% Target Line. The red 161.8% Target Line is the $1.59 price level.

Using a Fibonacci Retracement Tool and a Fibonacci Extension Tool to Calculate Downside Price Targets for the Current Pullback

Wait for the MACD Histogram on the daily chart to show at least 2 or 3 consecutive days of decreasing selling momentum. When that happens, notice where the share price is. Has it completed a 61.8% Retracement at that point? If so, an initial scale-in purchase could be made. But I would only feel comfortable if other technical indicators signal a reversal also.

For example, I would prefer to see a bullish reversal candlestick pattern of some sort on above average buying volume before considering my initial purchase.

INFI – Upside Potential

This is the same 1 year daily candlestick chart where I am going to assume to pullback areas for INFI’s share price. I have to assume a pullback area in order to place a Fibonacci Extension Tool on the chart and calculate some potential upside price targets.

The first pullback or support area is the 61.8% Retracement level calculated above, or a $1.99 price target. The second pullback area I am going to assume is a full re-test of the previous bottom at the $.84 price level.

Since I assumed 2 different pullback areas, I placed 2 different Fibonacci Extension Tools on the chart. The 3 price targets for each tool are the 61.8%, 100% and the 161.8% Target Lines.

Analyzing Potential Upside Price Targets for Infinity Pharmaceuticals (INFI) Based on the Assumption of a Successful Reversal

INFI’s share price was not able to “close the window” from the Falling Window candlestick pattern. That simply means the gap-down is still open. A Falling Window candlestick pattern is a bearish continuation candlestick pattern. INFI’s recent uptrend was not able to “close the window” or close the gap-down. Closing the gap-down should be the first priority for any new uptrend that starts.

I’ve identified some potential upside price target zones for INFI’s share price based on 2 different price reversal scenarios.

Scenario 1 – A successful reversal of INFI’s share price from the $1.59 price level has the potential to close that window. A successful reversal from the $1.59 price area could lead to either a $4.59 or a $6.44 price target. Those are the 100% and 161.8% Target Lines from the black Fibonacci Extension Tool. Starting another uptrend will most likely take some form of good news or good earnings reports.

Scenario 2 – A successful reversal of INFI’s share price from the $.84 price level has the potential to reach the $3.84 price level again or surpass it and. That is the 100% Target Line from the green Fibonacci Extension Tool. That would not quite close the window or gap-down. The other price target for the green Fibonacci Extension Tool is the 161.8% Target Line. Reaching the green 161.8% Target Line would push INFI’s share price up towards the $5.60 price level.

Infinity Pharmaceuticals (INFI) Stock Chart Summary

This Infinity Pharmaceuticals (INFI) stock chart review indicates that its share price is under pressure. After a downtrend that lasted for years, a re-test of the $.84 bottom it previously set seems most probable. But there are enough bullish signals to indicate a possible reversal higher, in the $1.59 – $1.99 price level.

But if the $1.59 – $1.99 price level does not hold, expect a full re-test of the $.84 previous bottom.

Regardless of the price level, make sure the MACD Histogram on INFI’s daily chart shows several consecutive days of decreasing selling momentum. When it does, consider making that first scale-in purchase to go long. if INFI’s share price is at or near the red 161.8% Target Line.

Once a rebound does ensue, it appears that the $3 price level should be in play at a very minimum for INFI. It would probably be best to revisit this stock once a potential rebound does start. If anyone is interested, ask for an update at that time!

Good luck trading!

On deck: Nestle (NSRGY)