ImmunoGen, Inc. (NASDAQ: IMGN)

ImmunoGen, Inc., a biotechnology company, develops targeted anticancer therapeutics. The company develops its products using its targeted antibody payload technology. It offers Kadcyla, an antibody-drug conjugate for the treatment of HER2-positive metastatic breast cancer. The company’s clinical-stage anticancer compounds include IMGN901, which is in Phase II clinical trials for the treatment of small-cell lung cancer; IMGN853 that is in Phase I clinical trials for ovarian cancer and non-small cell lung cancer; IMGN289, which is in active investigational new drug application stage for the treatment of head and neck cancer, and non-small cell lung cancer; and IMGN529 that is in Phase I clinical trials for non-Hodgkin lymphoma. It also develops compounds, such as SAR3419, which is in Phase II clinical trials to diffuse large B-cell lymphoma and B-cell acute lymphoblastic leukemia; SAR566658 that is in Phase I clinical trials for solid tumors; SAR650984, which is in Phase I clinical trials for multiple myeloma; AMG 172 that is in Phase I clinical trials for kidney cancer; AMG 595, which is in Phase I clinical trials for glioblastoma; BAY 94-9343, that is in Phase I clinical trials for mesothelioma and ovarian cancer; and BT-062, which is in Phase I clinical trials for multiple myeloma. The company has collaborations with Sanofi; Amgen; Bayer HealthCare; Biotest AG; Eli Lilly and Company; Roche; and Novartis Institutes for BioMedical Research, Inc.

IMGN has formed a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of IMGN (ImmunoGen, Inc.) below with my added notations:

1-year chart of IMGN (ImmunoGen, Inc.)

Over the last (5) months IMGN has created a key level of support at $15. That $15 support is also the current “neckline” for IMGN’s H&S pattern. Above the neckline you will notice the H&S pattern itself (blue). Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to break below its $15 support. If IMGN does break that level, the stock should move lower from there.

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The Tale of the Tape: IMGN seems to have formed a head & shoulders pattern. Although a trader could go long at $15 expecting a bounce, the stock’s pattern implies an eventual breakdown. If that happens, a short trade should be entered on a break of the $15 level.

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

Follow me on Twitter: @cmtstockcoach