Shares of Bionano Genomics, Inc. (NASDAQ:BNGO) reached at $7.15 price level during last trade its distance from 20 days simple moving average was -36.93%, and its distance from 50 days simple moving average was -15.42% while it has a distance of 181.28% from the 200 days simple moving average. Investors in Bionano Genomics, Inc. BNGO need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 16, 2021 $20.00 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for Bionano Genomics shares, but what is the fundamental picture for the company? Currently, Bionano Genomics is a Zacks Rank #3 (Hold) in the Medical – Biomedical and Genetics industry that ranks in the Bottom 23% of our Zacks Industry Rank. Over the last 30 days, one analyst has increased the earnings estimates for the current quarter, while none have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 7 cents per share to a loss of 6 cents in that period.
Given the way analysts feel about Bionano Genomics right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
Past 5 years growth of BNGO observed at 0, and for the next five years the analysts that follow this company are expecting its growth at 0. The average true range (ATR) is a measure of volatility introduced by Welles Wilder in his book, “New Concepts in Technical Trading Systems.” The true range indicator is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close and the absolute value of the current low less the previous close. The average true range is a moving average, generally 14 days, of the true ranges.
The stock has a market cap of $1.25B with 271.83M shares outstanding, of which the float was 151.94M shares. Analysts consider this stock active, since it switched Trading volume reached 59,736,820 shares as compared to its average volume of 90.22M shares. The Average Daily Trading Volume (ADTV) demonstrates trading activity related to the liquidity of the security. When Ave Volume tends to increase, it shows enhanced liquidity.
But when Ave Volume is lower, the security will tend to be cheap as people are not as keen to purchase it. Hence, it might have an effect on the worth of the security. BNGO’s relative volume was 0.64. Relative volume is a great indicator to keep a close eye on, but like most indicators it works best in conjunction with other indicators and on different time frames. Higher relative volume you will have more liquidity in the stock which will tighten spreads and allow you to trade with more size without a ton of slippage.
Important Technical Indicators Analysis Report and Volatility Measures:
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates the predictable return of an asset based on its beta and predictable market returns. Beta is also known as the beta coefficient.
A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. After a recent check, beta value for this stock comes out to be 0. A statistical measure of the dispersion of returns (volatility) for BNGO producing salvation in Investors mouth, it has week volatility of 17.91% and for the month booked as 14.05%. Regardless of which metric you utilize, a firm understanding of the concept of volatility and how it is measured is essential to successful investing. A stock that maintains a relatively stable price has low volatility. When investing in a volatile security, the risk of success is increased just as much as the risk of failure.
The volatility value is used by the investors for various reasons and purposes in measuring the fundamental price change and the rate of variation in BNGO’s price. The ART is a specific type of indicator, which is capable of weighing up stock volatility in the financial markets effectively.
Bionano Genomics, Inc. has an average true range (ATR) of 1.57. Other technical indicators are worth considering in assessing the prospects for EQT. BNGO’s price to sales ratio for trailing twelve months was 171.73 and price to book ratio for most recent quarter was 65.00, whereas price to cash per share for the most recent quarter was 66.33. The Company’s price to free cash flow for trailing twelve months was 0. Its quick ratio for most recent quarter was 1.00. Analysts mean recommendation for the stock was 1.70. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
Should You Go With High Insider Ownership?
Many value investors look for stocks with a high percent of insider ownership, under the theory that when management are shareholders, they will act in its own self interest, and create shareholder value in the long-term. This aligns the interests of shareholders with management, thus benefiting everyone. While this sounds great in theory, high insider ownership can actually lead to the opposite result, a management team that is unaccountable because they can keep their jobs under almost any circumstance.
Bionano Genomics, Inc.‘s shares owned by insiders remained 0.06%, whereas shares owned by institutional owners are 6.90%.
Where Do Relative Strength Index (RSI) Stands?
Perhaps, it is one of the most important indicators, because it is used in the technical analysis of the stock in the money market. The relative strength index (RSI) is claimed to depict the latest and past performances of the stock market, based upon the ending price volumes of the current trading period. The RSI is characterized as a momentum oscillator, evaluating the speed and scale of directional price shifts. The momentum exemplifies both rising and falling rates of the Price in the stock market. Using RSI, you can calculate momentum as the percentage of elevated closes to reduced closes. But if the stocks have experienced optimistic changes rapidly, then it might have an increased RSI than stocks. So, it might cause negative changes in the market.
The RSI index is largely used by traders on a 14-day time period and is evaluated on a range from 0 to 100, along with both high and low volumes marked at 70 and 30, correspondingly. Both the shorter and longer timeframes are used by the traders for shorter and longer purposes. It further adds high and low ranges like from 80 to 20 and from 90 to 10. This trend takes place less repeatedly.
However, it represents stronger momentum in the market. In the meantime, the Accenture plc’s 14-day RSI was settled at 37.78. All in all, the trends of the stock market were shifting slowly but surely.
Meanwhile, BNGO traded under umbrella of Healthcare sector, the stock was traded -54.43% ahead of its 52-week high and 2760.00% beyond its 52-week low. So, both the price and 52-week high indicators would give you a clear-cut picture to evaluate the price direction.