Stock Market

Don’t Look Now, but Bionano Genomics May Be a Buy

What’s left to say about Bionano Genomics (NASDAQ:BNGO) that hasn’t been said before? Not much. But if we let the price chart of BNGO stock do the talking, it could be a double bottom that’s worthy of consideration from today’s investors.

Source: Shutterstock

Look out below! That’s what some might see if they bothered to pull up BNGO on their trading platform these days. It wasn’t always that way, of course.

In the months immediately surrounding a kick off to the trading year, shares of BNGO surged more than 3,000 %. It was part of what’s become a phenomenon in 2021. It was classic unhinged stock activity with retail-powered Reddit and the Wallstreetbets chatroom at the center.

BNGO Stock Gets Noticed

But from Bionano’s humble or nearly lifeless start of about 50 cents in mid-December to February’s high of $15.69, the well-watched rise in stock price was also doing more than just getting noticed by just the Reddit crowd.

Last year’s wunderkind fund manager Cathie Wood of Ark Investments was mulling Bionano’s Saphyr optical genome mapping (OGM) system for a stake in the outfit’s Ark Genomic Revolution ETF (NYSEARCA:ARKG). And it’s easy to understand why. The Mayo Clinic. Duke University and Penn State College of Medicine. They’re among medical research’s elite and they’re using Saphyr.

BNGO’s technology fills a critical gap between long and short-read sequencing technologies. And in layman’s terms, Saphyr’s OMG system helps target cancer treatments and prenatal screening. It even the ability to help unlock novel coronavirus secrets.

Is Saphyr a Game Changer?

Bionano’s Saphyr has the type of stuff to become a game changer. And as many of today’s investors are aware, that promise is the kind of wager ARK loves to bet aggressively on and won big with. Think Tesla (NASDAQ:TSLA), Square (NYSE:SQ) or Grayscale Bitcoin Trust (OTCMKTS:GBTC).

But in the here and now most aren’t on board BNGO stock. And some never were.

Stock-trading chatrooms are focused on hot spots like Grayscale Ethereum Classic Trust’s (OTCMKTS:ETCG) spectacularly silly price surge or meme alt coin play Dogecoin (CCC:DOGE-USD) fetching and comedic attention-getting $80 billion valuation. BNGO stock has suffered at the hands of a Ritalin-using pump and dump scheme making waves in 2021.

Then there’s Cathie Wood. It turns out Ark’s interest in Bionano Genomics never became anything more than simply a case of window shopping. Amid commited stakes in Regeneron (NASDAQ:RGEN), Teladoc (NYSE:TDOC) and 58 other genomics and healthcare-related stocks, BNGO is still nowhere to be found.

Fragile Momentum

As it stands, after being kneecapped, BNGO shares trade for around $5.50 a share and off roughly 65% from its peak valuation. To be sure, a multiple decompression trade out of higher-octane growth stories nearing three months in duration is a choice spot for blameful fingers to point at. Say hello to Virgin Galactic (NYSE:SPCE) or Churchill Capital (NYSE:CCIV) for further confirmation of that reality.

BNGO stock’s other related malady is a much longer timeline for Saphyr’s widespread adoption as a healthcare tool. Patience for that kind of outcome doesn’t mix well with yesterday’s fragile momentum sponsorship.

Lastly and to be fair, even if Ark Invest did purchase millions of shares of Bionano, it probably wouldn’t have mattered. Amid today’s more dearly held appreciation for cyclical and value-based risk assets, Ark’s spectacular fall is certain evidence of why boilerplate language of past results being no guarantee of future returns exists.

BNGO Stock Daily Price Chart

Source: Charts by TradingView

What goes around, comes around. And today, with BNGO stock determinedly out-of-favor, a bullish contrarian style purchase has set up on the price chart. In Friday’s session, shares of Bionano have confirmed a small double bottom formation that’s undercut the stock’s March low. With the corrective pattern also centered at the 62% retracement level and sporting a bullish stochastics divergence on the cusp of crossing over, the situation makes for an interesting-looking buy.

Bottom line, BNGO is no core holding like Apple (NASDAQ:AAPL) or Home Depot (NYSE:HD). That’s regardless of Wall Street’s flavor of the day. But given the pattern’s downside risk, a triple-bagger or greater in profit potential on a second challenge of apex resistance looks reasonable.

And maybe, with help from traders ready to turn their attention elsewhere, buying BNGO stock today looks even better.

On the date of publication, Chris Tyler holds, directly or indirectly Greyscale Bitcoin (OTCMKTS:GBTC), Ark Innovation ETF (ARKK) and  Genomics ETF (ARKG), but no other securities mentioned in this article.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100%  the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.