ADC Therapeutics SA

ADC Therapeutics SA (NYSE: ADCT) is a Switzerland-based biotechnology company. It engaged in the development of antibody-drug conjugates (ADCs), used in the treatment of both solid and hematological cancers. Noted below are the key price Indicators for the stock:

As per our previous recommendation on ADCT on July 09, 2021, we recommended a ‘Speculative Buy’ rating on the stock at USD 23.19 level for 2-4 weeks duration from the technical analysis standpoint. However, considering the recent price action, technical indicators, resistance level analysis, and higher single digit returns; we are of the view that it is prudent to book profits at the current levels. Hence, we give a 'Sell' rating on the stock at the current price of USD 25.50 (at 10:00 AM, ET as on Aug 05, 2021, before market close). The summary of our 'Sell' rating and price movement since the previous recommendation on ADCT is provided as below:

Price action and technical indicator analysis (on the Daily chart): 

ADCT’s prices moved up by ~10.05 percent from the recommended entry price and made a high of USD 25.52 on Aug 05, 2021. Prices witnessed a sharp upside movement in the past couple of sessions and now facing stiff resistance of USD 25.76. A downside movement from the current levels may start a correction phase in the stock that could drive the prices to the lower levels.

On the daily chart, RSI (14-period) is trading near the overbought zone at ~67.43, further supporting a price reversal. However, prices are still sustaining above 21-period and 50-period SMA, which acts as the support levels for the stock.

Conclusion:

Based on the above-mentioned price action, RSI (14-period), and resistance level analysis, we recommend a ‘Sell’ rating on ADCT and suggest investors to book profit at the at the current price of USD 25.50 (at 10:00 AM, ET as on Aug 05, 2021, before market close). 

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risk, currency risks, and social and political instability risks etc.

How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is at 10:00 AM, ET as on Aug 05, 2021, before market close. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.