Anacor Pharmaceuticals Inc (NASDAQ: ANAC)

Anacor Pharmaceuticals, Inc. focuses on discovering, developing, and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. The company’s lead product candidates include tavaborole, an antifungal product candidate that is in Phase III clinical development for the treatment of onychomycosis; and AN2728, an anti-inflammatory product candidate, which completed Phase II clinical trials for the treatment of atopic dermatitis and psoriasis, and chronic inflammatory skin diseases. It also develops AN5568, a Phase I human clinical trial product targeting human African trypanosomiasis. The company’s clinical pipeline also includes AN2718, a topical antifungal product candidate, which is in Phase I clinical trials for the treatment of onychomycosis and fungal infections of the skin; AN2898, a topical anti-inflammatory product candidate that completed Phase IIa clinical trials for the treatment of atopic dermatitis and psoriasis; and AN3365, an antibiotic for the treatment of infections caused by Gram-negative bacteria. It has research, development, and collaboration agreements with GlaxoSmithKline LLC, Eli Lilly and Company, Schering Corporation, Medicis Pharmaceutical Corporation, Bill and Melinda Gates Foundation, and Medicines for Malaria Ventures.

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

1-year chart of ANAC (Anacor Pharmaceuticals, Inc.)

After forming a clear double top (green), ANAC confirmed that pattern when it broke below the $16 (blue) support. The expectation would have been for a bigger fall than just down to $14, but now the stock has broken back above $16. Higher prices should follow, most likely a run back up to at least the $18 (red) resistance.

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The Tale of the Tape: ANAC is back above $16. A long trade could be made on a pullback to $16 with a stop loss placed under that level. A break back below $16 would be an opportunity to get short the stock.

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