One Small Step From Organovo Holdings is Actually a Very Big One (ONVO)

It's certainly not the way I would have likes for things to shake out with Organovo Holdings Inc. (NYSEMKT:ONVO), but I'm not going to complain - it's pointed in the right direction. More important, for anybody who's been wanting into an ONVO trade but wasn't sure where the right entry spot was, today's move is it, with just one little caveat.

If the ticker 'ONVO' seems vaguely familiar, it may be because yours truly has looked at it three separate times since early June. The first look was a bullish stance (right in front of a runup), the second one was a bearish stance (right in front of a pullback), and the third look from August 2nd was a bullish look at Organovo Holdings again, which hadn't gotten much traction... until today.

Simply put, though it took a while, Organovo Holdings Inc. shares have rocked their way out of a wedge formation after finding repeated support at any and all of its key moving average lines. The breakout is unfurling in the second day of decidedly-higher volume from ONVO too, suggesting this is the real deal.

The only flaw I see with the breakout effort is the fact that the stock left behind a gap with this morning's jump. Generally speaking, the market doesn't like to leave gaps unfilled, meaning there's a good chance ONVO could slide back to Thursday's high of $6.08 to close the gap. Even if it does, however, don't sweat it - the bulls have tipped their hand with today's move, and even if we do get that dip, the odds are good that we'll bounce right back out of it. There's just not much room left to knock around inside this narrow tip of the triangle, and those moving average lines stand ready to act as a floor.

The big question is, of course, what prompted the breakout in the first place? After all, ONVO can only keep rallying if it can keep new investors flowing in. The answer is, nothing specific from the company, but a handful of positive write-ups from opinion-journalism. That's ok though. Opinion-driven buying can be and often is longer-lived than news-based bullishness is. Whatever the case is for Organovo Holdings, the technical breakout looks healthy enough to use as a buy signal.

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