Shares of CRISPR Therapeutics AG (NASDAQ: CRSP) may be forming a “V” bottom on the chart. That means the stock could rally.

V bottoms and V tops illustrate rapid reversals of a trend. A characteristic of them is the large amount of volume that trades. This shows that the buyers or sellers that created the moves lower or higher are finished.

With these investors out of the market, the stage is set for a reversal.

In late June, shares formed a V top on the chart. The high amount of volume that traded was a sign that a reversal was coming.

Now the opposite dynamic has occurred. After a long downtrend, a huge amount of volume has traded. This means the stock could be forming a V bottom and may be about to rally.

To learn more about chart reading, be sure to check out the new Benzinga Trading School.


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