Wall streets darling DNLI halts at key resistance
Since the pandemic March lows, Denali Therapeutics Inc (DNLI) has enjoyed a multi-month rally surpassing it’s January ‘20 highs with ease, amid a bout of increased buying activity following Q2 earnings. As well as individual investors, hedge funds are also optimistic about the future share price of DNLI. Official data shows the number of hedge fund bets increased to seven, meaning the bullish number of hedge funds currently holding positions in the security is at an all-time high.
DNLI is currently trading at 41.56 at the time of writing, which is a key level of interest as it tests multi-month fib extension at (3) taken from the highs of January ‘20 at (1) and the lows of March this year at (2). Coupled with that a well-formed rising wedge pattern is in play whereby it’s resistance line junctions exactly at fib extension (3). A break above this dual resistance cluster would be considered all the more bullish, with a view to 45.00 as the next target to watch for.
Any pullbacks around these current levels are expected to be shallow and short-lived, providing better buying opportunities for the midterm. Below wedge support throws this bullish outlook into question for the short to midterm.