• Rigel Pharmaceuticals (RIGL) is showing exceptional momentum, setting new 52-week highs on Aug. 22.
• Shares are up nearly 243% over the past year.
• The stock is trading above key moving averages and is supported by several “Strong Buy” analyst ratings.
• Fundamentals show impressive projected earnings growth this year, but both revenue and earnings are forecast to decline next year, raising caution.

Today’s Featured Stock

Valued at $744 million, Rigel Pharmaceuticals (RIGL) is a clinical-stage drug development company that discovers and develops novel, small-molecule drugs for the treatment of inflammatory diseases, cancers, and viral diseases. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. RIGL checks those boxes. Since the Trend Seeker signaled a buy on July 30, the stock gained 97.52%.

RIGL Price vs. Daily Moving Averages:

Please note that the increased price and volume is very recent, coming after shares languished for some time.

Barchart Technical Indicators for Rigel

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Rigel shares hit a new 3-year high on Aug. 22, touching $43.72 in intraday trading.

• Rigel has a Weighted Alpha of +125.68.
• RIGL has an 100% “Buy” opinion from Barchart.
• The stock gained 242.55% over the past year.
• RIGL has its Trend Seeker “Buy” signal intact.
• Rigel is trading above its 20-, 50-, and 100-day moving averages.
• The stock made 17 new highs and gained 111.95% in the last month.
• Relative Strength Index (RSI) is at 86.35%.
• There’s a technical support level around $40.43.

Don’t Forget the Fundamentals

• $744 million market capitalization.
• 7.76x trailing price-earnings ratio.
• Revenue is projected to grow 56.79% this year but decrease by 3.87% next year.
• Earnings are estimated to increase 396.16% this year but decrease by 32.59% next year.

Analyst and Investor Sentiment on Rigel

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like Wall Street analysts are split on RIGL, but both CFRA’s MarketScope Advisor and Seeking Alpha have “Strong Buy” ratings.

• The Wall Street analysts tracked by Barchart have issued 3 “Strong Buy” and 4 “Hold” opinions on the stock.
• Their price targets are between $23-$57.
• Value Line has lowered the stock rating to “Average” possibly because of the recent runup in price.
• CFRA’s MarketScope Advisor gives the stock a “Strong Buy” rating with a moderate risk assessment.
• Morningstar thinks the stock is 9% overvalued.
• 658 individual investors on Motley Fool think the stock will beat the market while 391 think it won’t.
• 11,460 investors monitor the stock on Seeking Alpha, which rates the stock a “Strong Buy.”

The Bottom Line on Rigel

Rigel currently has momentum and is hitting new highs plus it has a very low price-earnings ratio.  This stock seems to be a recent discovery and everyone’s darling.  Since analysts have forecasted decreasing revenue and earnings next year, maybe the momentum will stop.  Please monitor the high RSI to see where the momentum is going.

I caution that RIGL is volatile and even speculative in the current environment, which means investors should use strict risk management and stop-loss strategies.

Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.