Questcor Pharmaceuticals Inc (NASDAQ: QCOR)

Questcor Pharmaceuticals, Inc., a biopharmaceutical company, provides drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications. It primarily offers H.P. Acthar Gel, an injectable drug for the treatment of acute exacerbations of multiple sclerosis in adults; to induce a diuresis or a remission of proteinuria in the nephrotic syndrome without uremia of the idiopathic type or that due to lupus erythematosus; and as monotherapy for the treatment of infantile spasms in infants and children under two years of age. The company’s H.P. Acthar Gel also focuses on rheumatology-related conditions, including collagen diseases and rheumatic disorders. In addition, it offers Doral for the treatment of insomnia. The company sells its Acthar primarily to specialty pharmacies; and Doral to pharmaceutical wholesalers. Questcor Pharmaceuticals, Inc. was founded in 1990 and is headquartered in Anaheim, California.

To analyze the company’s stock for potential trading opportunities, please take a look at the 1-year chart of QCOR (Questcor Pharmaceuticals, Inc.) below with my added notations:

1-year chart of QCOR (Questcor Pharmaceuticals, Inc.)

After a nasty fall in September, QCOR has slowly worked its way higher, one level at a time. From November through January the stock created a clear level of support at $25 (green). Over the last (5) months, QCOR has commonly reacted to the level of $30 (blue), both as support and resistance. It has also not been uncommon for the stock to find support or resistance at the $35 level (red). In summation, QCOR primarily reacts to the increments of $5.

The Tale of the Tape: QCOR has broken below $30. A short position could be entered at the $30 resistance with a stop placed above that level. A long play could be made on a break above $30 with an expectation of a rally up to $35.

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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