Pacira Pharmaceuticals Inc (NASDAQ: PCRX)

Pacira Pharmaceuticals, Inc. develops, commercializes, and manufactures pharmaceutical products primarily for use in hospitals and ambulatory surgery centers worldwide. It develops pharmaceutical products based on its proprietary DepoFoam drug delivery technology. The company commercializes EXPAREL, a liposome injection of bupivacaine, an amide-type local anesthetic indicated for administration into the surgical site to produce postsurgical analgesia; and DepoCyt(e), a liposomal formulation of the chemotherapeutic agent cytarabine indicated for the intrathecal treatment of lymphomatous meningitis, a cancer of the immune system. Its product pipeline comprise EXPAREL that has completed Phase III clinical trials for postsurgical analgesia-nerve block administration; DepoNSAID, which is in preclinical trials for the relief of acute pain; and DepoMethotrexate, an oncology preclinical candidate, as well as Bupivacaine Liposome Injectable Suspension for veterinary postsurgical analgesia.

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

1-year chart of PCRX (Pacira Pharmaceuticals, Inc.)

PCRX had formed a key level of support at $60.00 (green) over the last (4) months. In addition, the stock created a down trending resistance starting from the end of February (red). These two lines combined had PCRX stuck trading within a common chart pattern known as a descending triangle.

At some point, the stock had to break support or break its string of lower highs, and yesterday the stock broke through resistance. The prior level of $70 (blue) could be a potential support now.


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The Tale of the Tape: PCRX formed a descending triangle pattern. A long trade could be made on a pullback to $70 with a stop placed below that level. A break back below $70 would set up a potential short trade.

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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

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