VIVUS, Inc. (NASDAQ: VVUS)

VIVUS, Inc., a biopharmaceutical company, engages in developing and commercializing therapies to address unmet needs in obesity, sleep apnea, diabetes, and sexual health. The company offers Qsymia, a drug for the treatment of obesity as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of 30 or greater, or 27 or greater in the presence of at least one weight-related comorbidity, such as hypertension, type 2 diabetes mellitus, or high cholesterol; and STENDRA for the treatment of erectile dysfunction. It also completed Phase II clinical studies of Qsymia for the treatment of obstructive sleep apnea; and Qsymia for the treatment of type 2 diabetes. The company has an agreement with Mitsubishi Tanabe Pharma Corporation for the development and commercialization of avanafil, a PDE5 inhibitor compound for the oral and local treatment of male and female sexual dysfunction.

To review VIVUS’s stock, please take a look at the 1-year chart of VVUS (VIVUS, Inc.) below with my added notations:

1-year chart of VVUS (VIVUS, Inc.)

VVUS has basically been trading in a wide range throughout the year. During the last three or four months the stock had been bouncing within a common pattern known as a rectangle. Rectangle patterns form when a stock bounces between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. VVUS’s rectangle pattern had formed a $15 resistance (red) and a $12 support (blue). Now that the stock has broken its rectangle support, the next level down would be $10 (navy).

The Tale of the Tape: VVUS has broken the bottom of its rectangle pattern. The possible long positions on the stock would be either on a fall down to $10, or on a break back above $12. The ideal short opportunities would be on a break below $10 or on a rally back up to $12.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

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