One of the StockTwits 50 stocks, $ISLN is breaking down on a huge volume. The stock had a nice run and at one point in September it was up 30%. Large number of market participants tend to lock in profits in the end of the month.
High volume 8% down days are a clear sign of distribution, so today’s action is a warning sign. With that said, many institutions are reluctant to buy new highs and prefer to add on pullbacks. In the case of $ISLN, it is very likely to see the stock pull back to its rising 50 day SMA, which will coincide with a previous zone of resistance, having the potential to turn into a support this time. Watch for a bounce in the $20 – $21 area.
