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Medical 3D-Printing Company Organovo (ONVO) Plunges Past Support, 200-Day SMA

By  +Follow March 27, 2014 5:35AM
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Shares of small-cap 3D-printing company Organovo (ONVO) plunged in early trading on Thursday, losing over 10 percent on heavy volume before recovering to losses close to 9 percent. The company, which makes 3D printers capable of replicating human tissue for use in laboratory settings, didn’t have a clear news item that would appear to be driving selling. However, the stock has been experiencing a general pullback from the 52-week high it reached on November 18 last year.

Shares opened down about 1.5 percent at $8 and plunged to close to $7.50 before recovering to hover around $7.75 for much of the morning. The major losses didn’t begin to mount until just before 11:30 am ET, at which point volume increased heavily and shares fell sharply, hitting a low of $7.16 apiece and mostly trading below $7.25 a share.

The timing and size of the move would seem to indicate a specific piece of news sparking a sell-off, but there weren’t any particular actionable news items to speak of. The company had presented at the 2nd Annual Regen Med Investor Day on Wednesday, but it’s unclear that any of the content of that presentation could be at the root of the day’s move.

Technical Factors, Chart May be Culprit for ONVO Sell-off

A close look at the chart patterns, though, may indicate some technical factors that could have helped motivate the run. Since a heavy sell-off in mid-November when the rumored buyout that appeared to be spurring a huge spike failed to materialize, the stock has been pulling back significantly, falling over 40 percent from its 52-week high to the closing bell yesterday. However, throughout this pullback, shares appeared to have strong support at $8 since crossing that level in early November.

Since reaching its 52-week high, a triangle pattern appeared to be forming as resistance kept falling and a second, rising support level approached it. As such, the more-recent sell-off that started on March 18 and had shares down over 7 percent through yesterday appeared to be a downward breakout from that pattern.

However, today’s open price began flirting with that long-term support level at $8 and dipped below it, the first time shares had hit that level in almost five months. After trading below $8 for much of the morning, it’s possible that traders started to get the sense that the important barrier wasn’t going to hold and a bounce back wasn’t forthcoming. A sentiment that was probably reinforced when the stock crossed its 200-day SMA from above at about $7.50 a share.

More Correction...or a Buying Opportunity?

However, the potential for a bounce-back in the next few days also appears strong based on the technical profile of the stock and given that the sell-off doesn’t appear to be motivated by the specifics of the company but rather a general pullback from an artificial high created by buyout rumors.

The breaking of the support level at $8 may not hold for long, and bargain buyers may see it as a chance to get in on a company with a very hot technology with a potentially bright future. 3D printing is an industry that very likely has much to look forward to, and Organovo is one of the more unique plays in that segment.

That sentiment is likely to be bolstered by anyone considering the 14-day RSI and 14-day stochastic RSI for the stock. Today’s sell-off has pushed the 14-day RSI below 30.00, a level that’s traditionally considered the barrier for oversold territory. And the 14-day stochastic RSI has been below 0.20, also traditionally the barrier for a stock being considered oversold, since yesterday.

Finally, the timing of the move could be important. Monday marks the end of Q1 2014, what could be an important barrier for some on the buy-side constrained by the need to keep their quarter-end balance sheets looking clean. The markets have seen a relative volume halt in the approach to the end of the month, potentially fueled by fund managers sitting in a holding pattern until the calendar turns over to April. If any of these actors are waiting for the start of Q2 before acting on any value plays, it could bode well for Organovo investors.

Of course, it’s also just as possible that its current trading level is still correcting for the buyout rumors that drove it to previous highs and the stock will continue this decline, perhaps even picking up speed having now broken its previous support level. This would seem even more possible if one buys into the idea that health care stocks are currently in a bubble after a wild 2013 that saw biotechs making major gains.

Given the young segment and the relatively small size of the company, any predictions about future price movements likely aren’t of much value. And only time will tell if the bulls or the bears win out on Organovo in the long run.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for ONVO
chartguy89
17 Sep 14 01:55:11
ONVO 7.08 Stock Charts $ONVO Organovo Holdings Inc. (NYSE MKT) Last Updated: 09/17/2014 03:55:16 ONVO Stock Ch http://t.co/EMRxAlcRK1
Stockaholics
17 Sep 14 00:43:59
Our Platinum Penny Stock Picks, Gained 90% In The Past 2 Days! Get our next pick early: http://t.co/hep0lGZUgZ $STNG $ONVO
Stockaholics
16 Sep 14 21:04:18
Our Platinum Penny Stock Picks, Gained 90% In The Past 2 Days! Get our next pick early: http://t.co/hep0lGZUgZ $ONVO $BTG $LNG
US Banking News
16 Sep 14 17:36:59
Insider Selling: Organovo Holdings Insider Sells 30,000 Shares of Stock $ONVO http://t.co/HQuxpC90xQ
WKRB News
16 Sep 14 17:26:35
Insider Selling: Organovo Holdings Insider Sells 30,000 Shares of Stock $ONVO http://t.co/ox63ePdLgW
Clover Bragg
16 Sep 14 16:04:14
$ONVO - Statement of Changes in Beneficial Ownership (4) http://t.co/FylFsKC0hy
StockNews
16 Sep 14 16:04:11
$ONVO - Statement of Changes in Beneficial Ownership (4) http://t.co/GS01j2NqDi
Pzaa...Guy
16 Sep 14 16:04:08
$ONVO - Statement of Changes in Beneficial Ownership (4) http://t.co/mqudWQygFz
VisualStock Resource
16 Sep 14 16:04:06
$ONVO - Statement of Changes in Beneficial Ownership (4) http://t.co/WdnseoQptz
3DPrintingStocks.com
16 Sep 14 13:44:57
$DDD $SSYS $XONE $AMAVF $VJET $ONVO are the components of the "3D Printing Stock Index", which rose 1.3% today @ https://t.co/zvTJ6VVQK0
Stockaholics
16 Sep 14 13:35:08
$BRNW Ran Up 145% So Far Today! Huge News: http://t.co/agBJ7Ngnzq $STNG $ONVO
Stockaholics
16 Sep 14 13:03:47
$BRNW Ran Up 145% So Far Today! Huge News: http://t.co/agBJ7Ngnzq $ONVO $BTG $LNG
bearcub1
16 Sep 14 12:15:58
RT @JacobWolinsky: Iv read 100s if not 1000s of IR pages never seen anything remotely similar to $ONVO 's (nor as childish) http://t.co/IQ…
UnionSquare Research
16 Sep 14 10:39:55
RT @JacobWolinsky: We just responded to $ONVO RE Libel case H/T to @ActivistShorts for some of the data (they are mentioned in article) ht…
Jacob Wolinsky
16 Sep 14 10:29:35
If a/1 can find an IR page similar to $ONVO 's http://t.co/IQhXCakwFC please send it to me
Jacob Wolinsky
16 Sep 14 10:28:02
Iv read 100s if not 1000s of IR pages never seen anything remotely similar to $ONVO 's (nor as childish) http://t.co/IQhXCakwFC
Brandon
16 Sep 14 10:14:55
RT @JacobWolinsky: We just responded to $ONVO RE Libel case H/T to @ActivistShorts for some of the data (they are mentioned in article) ht…
Jacob Wolinsky
16 Sep 14 10:13:27
We just responded to $ONVO RE Libel case H/T to @ActivistShorts for some of the data (they are mentioned in article) http://t.co/IQhXCakwFC
Jacob Wolinsky
16 Sep 14 10:12:35
RT @valuewalk: ValueWalk Responds To @Organovo http://t.co/TPVuav1lYr $ONVO
ValueWalk
16 Sep 14 10:12:04
ValueWalk Responds To @Organovo http://t.co/TPVuav1lYr $ONVO
STOCKPRO
16 Sep 14 09:56:10
$ONVO stop complaining about shorts and just release a kick ass pr...the chart is ready...you have the power. @Organovo
STOCKPRO
16 Sep 14 09:37:39
Back in $ONVO for another swing 7.15ish risk 7s
Adam
16 Sep 14 02:58:17
@GothamResearch @FD Time running out for libelous short sellers? $ONVO $QPP http://t.co/S8X3dDvqmP
Stockaholics
16 Sep 14 01:37:15
$AZFL Gained 68.2% In Just 3 Days, After Our Penny Stock Alert! Huge Update: http://t.co/f6EXGyxEe9 $ONVO $BTG $LNG
Stockaholics
15 Sep 14 21:54:09
Our SECRET Alert on $INOH Closed Up 60% For Platinum Members Today! Major News: https://t.co/HzD6J3YtmW $STNG $ONVO
Jacob Wolinsky
15 Sep 14 18:57:12
Ok spoke to our lawyer im gonna write a rebuttal to this lie from $ONVO 'investor relations' http://t.co/e61m13lK4H
Stockaholics
15 Sep 14 15:58:25
Our SECRET Alert on $INOH Closed Up 60% For Platinum Members Today! Major News: https://t.co/HzD6J3YtmW $ONVO $BTG $LNG
Joanna Valdez
15 Sep 14 14:21:54
RT @valuewalk: $ONVO wins lawsuit against short seller, Simeon Research
DamnGoodTrader
15 Sep 14 13:33:59
$GSAT $BTG $TXMD $LNG $ANV $NGD $CFP $EOX $ONVO $TPLM $GST $FB $AAPL $SPY $OREX $TWTR $ALKM $KIOR http://t.co/DN48peiDCI
Daily Contracts
15 Sep 14 13:22:02
Real-Time feed of company contracts, original agreements and executive updates from Organovo Holdings, Inc. $ONVO http://t.co/SAjv6lsBUi
Big Money
15 Sep 14 12:52:59
$ONVO whats with this volume spikes. 500k AH friday, now this. its almost as if their trying to pump up the volume. somebody wake me at$11+
Stockaholics
15 Sep 14 12:29:36
$DKAM Shot Up 150% And Has Seen Over 400 MILLION Volume Today! Huge News: http://t.co/PmkoXscmSi $ONVO $BTG $LNG
Big Money
15 Sep 14 12:05:27
$ONVO and $DGLY for green days tomorrow
Big Money
15 Sep 14 11:38:01
$ONVO wow nobody noticed the volume spike? okay how about when new high of day hits in a minute? no, ok how about red to green?
Dave Kelly
15 Sep 14 11:35:48
If the market repeats it's 2014 patterns, buyers will step in. $TWTR $TUBE $VEEV $ONVO $FB
Big Money
15 Sep 14 11:20:47
hey there $ONVO 300k volume spike :)
SpoonFedStocks
15 Sep 14 11:06:25
@SpoonFedStocks Ugly candles: $DDD, $TWTR, $YOKU, $SDRL, $NTLS, $ONVO
TV_Trading Ideas
15 Sep 14 11:00:51
onvo $ONVO http://t.co/svYmsxzCOq
Stockaholics
15 Sep 14 09:31:24
We just released a major mid-day alert on MLHC! Check it out: http://t.co/zPRXsXfAGO $ONVO $BTG $LNG
Big Money
15 Sep 14 09:27:57
$ONVO bottom on the daily
Jeet
15 Sep 14 08:32:39
Glad I sold off last week with a 24% gain combined overall in $gild $mnkd $aapl and $born still holding a small position in $onvo for long
unemon
15 Sep 14 06:14:50
Simeonresearch ... will we hear again from you ? $ONVO Wins Suit Against Simeon Research. Doesn't Change the THAT Fact $ONVO's worth is $1.
Sheeraz Raza
15 Sep 14 06:13:35
RT @JacobWolinsky: $ONVO lawsuit update - will see if we can say more... http://t.co/RrSz3L3vPF
Jacob Wolinsky
15 Sep 14 06:11:01
$ONVO lawsuit update - will see if we can say more... http://t.co/bdHaSw6e3K
ValueWalk
15 Sep 14 06:07:53
UPDATED: Organovo Wins Suit Vs Simeon Research http://t.co/tnliCcvtJY $ONVO
BV Healthcare
15 Sep 14 05:12:44
$ONVO Organovo Holdings, Inc.'s Presentations Now Available for On-Demand viewing at RetailInvestorCon.. http://t.co/s9ijolnniT
Clover Bragg
15 Sep 14 05:10:16
$ONVO - Current Report Filing (8-k) http://t.co/OapgugLoX1
StockNews
15 Sep 14 05:10:14
$ONVO - Current Report Filing (8-k) http://t.co/TGlKjxPubQ
Pzaa...Guy
15 Sep 14 05:10:09
$ONVO - Current Report Filing (8-k) http://t.co/A2o36ZmGGz
VisualStock Resource
15 Sep 14 05:10:08
$ONVO - Current Report Filing (8-k) http://t.co/WLJ5z2p5bO
				
				
By  +Follow March 27, 2014 5:35AM
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