Stop Loss for KALVISTA

One of our reader dropped us a question on the stop loss level for KALVISTA and we provided a reply in the thread’s comments, which is reproduced here below:

You are right, I did not update this position with a stop-loss level. Fact is, I also have this stock in my private portfolio and with a worse entry price of $12 than suggested to my readers (I tend to lack patience and anticipate price moves). I usually take my decisions to stay in an equity trade or to close my position on a weekly close basis and it is actually difficult to provide a precise stop level at this stage for KALVISTA due to the high price volatility.

I took a closer look and used my IB platform on which I have a longer price history for the stock and identified the following interesting monthly set-up (see Chart).

Both fundamental and technical reasons combined make me not worry too much as they both combined into a rationally strong bullish view. Technically speaking the price is supported by the 7-period moving average (blue arrow on the chart) at approximately $8.5.

I would not be surprised to see the price spiking temporarily below $9 and will certainly hold the shares in my portfolio as long as the price does not close below this moving average. I do not expect the $8.5 level to be violated even temporarily as it is a strong support for the price.

Let’s wait for one more week and the monthly close will be quite instructive. Don’t hesitate to remind me by then for an update.