Incyte Corporation (NASDAQ: INCY)

Incyte Corporation, a biopharmaceutical company, focuses on the discovery, development, and commercialization of proprietary small molecule drugs for oncology and inflammation. The company offers JAKAFI, an oral janus associated kinase inhibitor for the treatment of patients with intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF, and post-essential thrombocythemia MF. The company’s product pipe line includes INCB18424, which is in Phase III clinical trial for polycythemia vera; Phase II trial for essential thrombocythemia; Phase II trial for pancreatic cancer; Phase I/II trial to treat solid tumors/other hematologic malignancies. The company’s products in pipeline also comprise INCB28050 that is in Phase IIb clinical trail for the treatment rheumatoid arthritis and psoriasis; INCB28060 and INCB24360, which are Phase I clinical trial products for the treatment of solid tumors. It has a collaborative research and license agreements with Novartis International Pharmaceutical Ltd.; Eli Lilly and Company; and Pfizer Inc. The company was founded in 1991 and is headquartered in Wilmington, Delaware.

To analyze Incyte’ stock for potential trading opportunities, please take a look at the 1-year chart of INCY (Incyte Corporation) below with my added notations:

1-year chart of INCY (Incyte Corporation)

The main price level to watch on INCY is $20 (navy). Not only is the $20 resistance readily apparent over the last year, but that price also acted as support back in June. So, the $20 level is key to this stock. If you are bullish, you would want to buy the stock on a pullback to $20. However, if you are bearish, you might short INCY on a break of the $20 support.

The Tale of the Tape: INCY has a couple of simple trading opportunities based on its key level of $20. A long position could be entered at the $20 support with a stop placed below that level, or a short play could be made on a break below $20 if that should happen.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT