Following an impressive & very extended 876% rally off the 2017 lows, NKTR (Nektar Therapeutics) appears poised for a ~30% correction soon with the stock now in the ‘sweet spot’ of this very steep bearish rising wedge pattern with solid negative divergences confirming the bearish nature of the pattern. The price targets listed on the daily chart will likely remain although an official short entry trigger, along with the suggested stop, will follow shortly after NKTR moves from the S&P 600 Small Cap Index to the S&P 500 Large Cap Index (by-passing the usual stepping point into the S&P Midcap 400 Index) before the market opens on March 19th.
NKTR daily March 16th
When a stock moves up to a new index, especially going from a small cap index to the enormously popular & very large S&P 500 index, all S&P 500 index-tracking mutual funds & ETFs, such as SPY, must then (effectively) purchase the stock, hence my preference to wait until after the March S&P 500 rebalancing & inclusion of Nektar at the start of next week as the most recent advance may or may not yet fully reflect all buying in advance of the stock’s move into the $SPX.