You know, it's fun to be right about a particular stock, but at the same time, it's miserable if you didn't have the guts to actually act on the idea. That's my tale of woe with Atossa Genetics Inc. (NASDAQ:ATOS). On Monday of this week I was singing its praises, explaining how the chart suggested ATOS was on the verge of a breakout. But, I also suggested waiting for shares to take that one final confirming step.... a move above the 100-day moving average line. Now I wish I hadn't been so picky.
If you're reading this, then you likely already know ATOS is set for a big, bullish open. If the pre-market action persists through to the actual open, the stock could start the day somewhere around $1.34, up 28% from Tuesday's close. Ugh. Thing is, the MO hasn't actually changed - the right thing to do is wait for an entry. What's changed is the reason for that MO. On Monday, I didn't think Atossa Genetics was quite strong enough (technically speaking). Now I think it's too strong.
For what it's worth, the big jump was spurred by an announcement that the company inked a major partnership deal with another medical supply company with enormous reach. It's still too soon to say the scope of this agreement will be game-changing, but it'll make a big impact, that's for sure. On the flipside, it's not like this newly-forged partnership is a buyout offer that will hold ATOS at this new price level until the merger becomes official. No, the knee-jerk response to the announcement will eventually deteriorate, allowing Atossa Genetics Inc. shares to retreat some - perhaps a lot - regroup, and then restart the rally. While this second wind won't be as hot as today's move is, it's usually this second, better-paced trend that lasts.
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And yes, the underpinnings that attracted me to ATOS in the first place are still going to be a bullish factor in the future, reversing any pullback and rekindling an uptrend. In other words, no, I don't think Atossa Genetics is going to be some sort of a flash-in-the-pan one-hit wonder.
As a reminder, the bulk of the reason I liked the potential here was the length of time the chart has spent consolidating just above the horizontal floor around $4.29. It brewed up a storm (by not budging) for more than three months, so there's plenty more pent-up potential ready to be unleashed here. Now it just becomes a matter of timing, and letting the stock find those new bearings. Today's surge overshoots that new groove a little, and I suspect the profit-takers will dig in pretty soon. Let them do their thing, wait for a pullback, and then step in on the next measurable upswing.
And next time, just tell me to go ahead and pull the trigger.
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