Nektar Therapeutics (NASDAQ:NKTR) is a $2B clinical trials biotech company, headquartered in San Francisco, CA. The stock has mostly been hovering around the $20 mark for most of Nektar’s 30+ year history. There were a couple of exceptional surges, though, during the Dot-com bubble and most recently in 2017-2018.
The second one was fueled by the anticipated approval of the company’s promising non-addictive opioid drug. It saw the share price skyrocket to an all-time high of $111.36 in March, 2018. Alas, the drug never saw the light of day and the stock is down 90% to $11.18 as of yesterday.
Which makes it interesting again, since the risk is greatly reduced. In the meantime, Nektar has some other promising collaborations with pharmaceutical giants. Most notably BEMPEG, which is currently in phase 3 trials with Bristol-Myers Squibb (NYSE:BMY).
The Elliott Wave Side Of Nektar's Promise
However, guessing on drug approvals is very far from our circle of competence. Instead, we prefer to focus on situations with good risk/reward ratios and clear Elliott Wave patterns. Nektar definitely meets the first requirement and the chart below reveals a clear setup, as well.
Nektar ‘s weekly chart shows that the stock’s rapid selloff from that 2018 top has an impulsive structure. It is labeled 1-2-3-4-5, with two lower degrees of the trend visible with wave 3. According to the theory, a three-wave correction follows every impulse.
Furthermore, wave 5 looks like an ending diagonal. According to Ralph N. Elliott himself, ending diagonals are often followed by a “swift and sharp” reversal. Judging by the size of the impulse it corrects, the anticipated retracement can lift Nektar to at least $40 a share. Possibly much higher in case of positive BEMPEG readouts in 2022.