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Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Pullback Is a Buying Opportunity

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Pullback Is a Buying Opportunity

One company’s loss is another’s gain.

Rigel Pharmaceuticals
Ticker: NASDAQ:RIGL
Price: $1.79

New York-based Pfizer (NYSE: PFE) is the biggest pharmaceutical company in the world, so when it slashes costs and dumps drug candidates left and right, people take note. However sometimes what gets overlooked is that one company’s loss is another’s gain, and that’s what seems to have happened at South San Francisco-based Rigel Pharmaceuticals.

Rigel (NASDAQ: RIGL) said it raised a cool $130.4 million through a stock offering of 16.3 million new shares at $8 apiece.

The new shot of money will go toward supporting Rigel’s pipeline of drug candidates, which incorporates an oral treatment for rheumatoid arthritis that is in pivotal studies through a partnership with London-based AstraZeneca. But investors are also clearly buying into the story from earlier this month, in which Rigel said it basically got handed an enormous gift from Pfizer.

Essentially, the large pharma partner, as part of its cost-cutting and portfolio review, took a Rigel drug for allergy-induced asthma through early-stage clinical trials, prepared it for phase 2, then decided to bail out on allergy and respiratory drugs entirely. So Pfizer, after investing its money in crucial early stage tests, gave a much more valuable drug, called R343, back to Rigel.

Business Summary

Rigel Pharmaceuticals, Inc., is a clinical-stage biotechnology company. The Company is engaged in discovering, developing and providing novel small molecule drugs that improve the lives of patients with immune and hematological disorders, cancer and rare diseases.

The Company’s research focuses on signalling pathways that are critical to disease mechanisms. The Company’s product include TAVALISSE is an oral spleen tyrosine kinase (SYK) inhibitor for the treatment of adult patients with chronic immune thrombocytopenia (ITP).

Its current clinical programs include Phase 2 studies of fostamatinib in autoimmune hemolytic anaemia and IgA nephropathy, and a Phase I study for its interleukin receptor associated kinase (IRAK) program.

In addition, it has product candidates in development with partners BerGenBio AS, Daiichi Sankyo and Aclaris Therapeutics.

Shayne Heffernan Trade Idea

“We predict the future price of Rigel Pharmaceuticals will come in around $7.17 which will give the stock a price increase of +300.56%.”

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.88.

The projected upper bound is: 2.06.

The projected lower bound is: 1.53.

The projected closing price is: 1.79.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 28 black candles for a net of 7 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 21.6080. This is not an overbought or oversold reading. The last signal was a sell 9 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.03. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 56 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -164.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.

Rex Takasugi – TD Profile

RIGEL PHARMA closed down -0.150 at 1.790. Volume was 46% above average (neutral) and Bollinger Bands were 46% narrower than normal.

Open    High    Low     Close      Volume
1.900   1.940   1.760   1.790      2,127,757
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bearish
Moving Averages: 10-period    50-period      200-period
Close:           1.93         1.78           1.97
Volatility:      79           95             92
Volume:          1,614,765    1,586,792      1,542,192

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

RIGEL PHARMA is currently 9.2% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of RIGL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on RIGL.O and have had this outlook for the last 42 periods.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of the NASDAQ Stock Market.

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Sources:
Rigel Pharmaceuticals Company Website
Thomson Reuters Metastock and Eikon financial tools

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