Generation Bio (GBIO) Break Through Resistance

Generation Bio Co. (GBIO) is a genetics medicine company which is focused on creating gene therapies to provide durable and redosable treatments for patients suffering from rare and untreated diseases…

Generation Bio Co. (GBIO), which launched its IPO in June of last year is developing a portfolio of programs for rare and prevalent diseases of the liver and retina. It also focuses on the diseases of skeletal muscle, central nervous system, and oncology.

GBIO had $58 million in cash at the end of the last quarter and a current ratio of 15.1, indicating it has enough liquidity to handle short-term obligations. Earnings are expected to grow 23.20% this year. The company has a price to book ratio of 6.9 which is lower than its industry, but higher than the S&P 500.

The stock has shown positive near-term performance, but saw a large drop in December. Take a look at the 1-year chart of GBIO below with my added notations:

After skyrocketing at the end of 2020, and then crashing just as fast, GBIO formed a double bottom (green) price pattern. Bottoming, rallying up to a point, selling back off to a similar bottom, and then rallying back up again forms the pattern. 

GBIO would appear to have confirmed the pattern yesterday by breaking up through the $35 resistance (red) that was created by the double bottom pattern.  A long trade could be entered on a pullback down to the $35 level, with a protective stop placed under that level.

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