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Trading Intellia Therapeutics, ARKG ETF After Breakthrough Data

The genetics space has everyone's attention on Monday as traders look to capitalize on the potential of these stocks. Let's look at a few charts.

Gene editing stocks were on fire Monday, following positive data from Intellia Therapeutics  (NTLA) - Get Report.

Shares were up more than 30% in premarket trading following what many are calling an industry breakthrough.

The company released interim data from a phase 1 trial showing the ability to genetically edit cells inside a liver.

While the stock has come well off its highs, shares are still up about 45% on the session and hitting new all-time highs. At the day’s high, the stock was up more than 62%.

The news also sent Crispr Therapeutics  (CRSP) - Get Report higher on the day. Shares were gaining 5% in midday trading, but were up almost 10% at one point on Monday. 

Now many are wondering whether the group has the necessary catalysts to push higher.

Trading Intellia

Daily chart of Intellia stock.

Daily chart of Intellia stock.

All year, Intellia stock has found resistance in the $85 to $90 range. That was true going into this week too even though the stock was trading really well.

The stock was above all of its short-term and long-term moving averages, closed at the highs on Friday and had rallied in four out of the last five sessions.

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Bulls were looking for a move back to the prior high at $92, then possibly a breakout to $100 in the short term. However, today's news changes everything, evident by the stock’s surge up toward $140.

From here, shares look to be settling between the 161.8% and two-times range extensions.

If Intellia stock can hold up over the 161.8% extension, look for the 10-day moving average to eventually catch up and guide this name higher. Above the two-times range extension and Monday’s high could eventually put the 261.8% extension on the table near $170.

Trading Genetics Stocks More Broadly

Daily chart of the ARKG ETF.

Daily chart of the ARKG ETF.

The move in Intellia stock also has investors focused on the space more broadly, which brings the ARK Genomics Revolution ETF  (ARKG) - Get Report into focus. Some of its top holdings include Teladoc Health  (TDOC) - Get Report, Exact Sciences  (EXAS) - Get Report and Regeneron  (REGN) - Get Report.

It too is rallying on the day, up more than 3%.

Just like the other ARK funds, the ARKG ETF really struggled as a bear market hit growth stocks. Recovering now, the ETF is working on its sixth straight daily gain. It’s early, but if it finishes the week higher, it’ll be its sixth straight weekly gain as well.

However, shares are now trading up into the 50% retracement of the current range. That comes as it gaps higher into a significant support/resistance area as well.

For traders who were long, it seems like an optimal time to book some profits. If it can clear the 50% retracement, it opens up a push to the 61.8% retracement and $100 level.

If the current area acts as resistance, look for support at the 10-day moving average. Below the 10-day moving average and its more significant moving averages - like the 21-day and 200-day - could be back in play.