The Genedrive PLC (LON: GDR) share price spiked 27.1% higher on Friday despite the company not making any new announcements that could have triggered the rally higher. The lack of fundamental triggers behind the rally forces us to look at the technicals for answers.
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From a technical analysis perspective, we can see that Friday’s rally occurred as a crucial support level, which the price hit on Thursday. Usually, for a support level to hold and trigger a rally higher, also known as a bounce, buyers must come in and boost the affected stock.
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Therefore, we can conclude that Friday’s spike higher in Genedrive shares was driven by a flood of buyers who came in to defend the support level. Therefore, the buyers must have outnumbered the sellers forcing prices higher. Still, Genedrive shares had pulled back slightly today.
The last significant announcement from Genedrive was regarding its MT-RNR1 ID Kit, which had received a preliminary recommendation from the UK's National Institute for Health and Care Excellence (NICE) for use by the UK’s National Health Service (NHS).
The Genedrive® MT-RNR1 ID Kit is a unique test that can quickly and accurately identify babies with the primary genetic variant who may be at risk of hearing loss if given aminoglycoside antibiotics.
The test is unique since there are no other tests currently on the market that can provide physicians working with the NHS with quick results about the presence of the genetic variant, which they can use to make decisions about which antibiotics to prescribe in an emergency care situation.
Genedrive’s test kit is yet to get full regulatory approval. Still, the NICE recommendations after conducting their Early Value Assessment (EVA) Programme will go a long way in helping the test get all the necessary approvals in the UK.
Meanwhile, investors should continue monitoring Genedrive shares despite the lack of frequent updates from the company. We could see a massive spike higher once the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) approves the test.
The current setup could be a great buying opportunity, especially if Genedrive shares retest the current support level and bounce off it again.
*This is not investment advice.
Genedrive share price.
The Genedrive share price spiked 27.06% on Friday to trade at 27.00p, from Thursday’s closing price of 21.25p.
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