In-Depth Technical Analysis of DENALI THERAPEUTICS INC.

Our stockscreener has identified a possible breakout setup on DENALI THERAPEUTICS INC (NASDAQ:DNLI). This occurs when the stock consolidates following a significant upward movement. While the breakout outcome cannot be guaranteed, it may be worth monitoring NASDAQ:DNLI for potential opportunities.

Deciphering the Technical Picture of NASDAQ:DNLI

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 8 out of 10 to DNLI. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, DNLI is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• DNLI is part of the Biotechnology industry. There are 574 other stocks in this industry. DNLI outperforms 72% of them.
• DNLI is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
• DNLI is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• When comparing the yearly performance of all stocks, we notice that DNLI is one of the better performing stocks in the market, outperforming 75% of all stocks. However, this relatively good performance is mostly due to a recent big move.

For an up to date full technical analysis you can check the technical report of DNLI

Looking at the Setup

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:DNLI exhibits a 9 setup rating, indicating its consolidation status in recent days and weeks.

Besides having an excellent technical rating, DNLI also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 25.26. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for DNLI in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How to trade NASDAQ:DNLI?

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NASDAQ:DNLI and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout screener.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.