Threshold Pharmaceuticals, Inc. (NASDAQ: THLD)
Threshold Pharmaceuticals has been having an incredible run in the market as of late. Today, the stock is trading on high volume yet again. Recently, I did quite a bit of research to see what was causing this bullish run. Unfortunately, I wasn’t able to find a fundamental reason for the gains. Nonetheless, the run continues as high volume pushes this stock skyward. Today, we’ll talk about the psychology that leads to these types of runs, why they are dangerous, what we’re seeing from THLD today, and why you may want to consider taking your profits now.
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The Psychology Behind The THLD Bull Run
As mentioned above, Threshold Pharmaceuticals has been on a bullish run for several trading sessions at this point. After researching for a fundamental reason for the gains and finding nothing, it’s become clear to me that the gains we’re seeing are purely psychological.
While, at first glance, it may seem difficult to understand, trader psychology is relatively simple. There are several cases when a stock will reach what is perceived as a support level, then climb dramatically. The reason for the gain is simple. When the stock reaches support, we start to see upward movement. This upward movement attracts new investors that believe that the stock will rise. That belief becomes a self-fulfilling prophecy, and, soon, the stock rises far higher than anyone could have expected. All of this growth is, essentially, the result of new investors joining the fray, mixed with other investors who were already there increasing their positions. This is exactly what we’re seeing from THLD at the moment.
Why This Type Of Trend Can Be Very Dangerous
At the end of the day, this isn’t the first time that we’ve seen a trend like this, and these trends tend to be overwhelmingly dangerous. The bottom line is that, without positive fundamental news, THLD is going to have an incredibly hard time maintaining the levels we’re seeing. At some point, the stock will reach a level that investors perceive as resistance. At this point, we’re likely to see a massive sell-off, leading to big losses. If you happen to be late on selling your shares, your losses could be huge! While money can definitely be made on trades like this, it generally takes a very talented technical trader to make the most out of these types of trends.
What We’re Seeing From The Stock Today
As I mentioned above, Threshold Pharmaceuticals is continuing gains on incredibly high volume today. Over the past 50 days, the average daily volume on the stock has been 2,134,248 shares. However, today, 14,371,733 shares of the stock have traded hands. This strong volume has pushed the stock up to $1.06 per share after a gain of $0.18 (20.45%) thus far today (2:31).
You May Want To Consider Taking Your Profits
With the idea in mind that these trends can become incredibly dangerous, it might be best to consider taking your profits now. THLD has been climbing in the market for some time now with no fundamental backing. As a result, the stock is approaching overbought territory and will likely sell off incredibly soon. By taking your profits and moving to the next trade, you may avoid massive losses that could come down the line any time now.
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What Do You Think?
Where do you think THLD is headed moving forward? Join the discussion at TalkTRENDZ!
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