Aegerion Pharmaceuticals, Inc. (NASDAQ: AEGR)

Aegerion Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes therapies for patients with debilitating rare diseases in the United States. The company’s products include JUXTAPID (lomitapide) and LOJUXTA (lomitapide) hard capsules, an adjunct to a low-fat diet and other lipid-lowering treatments in patients with homozygous familial hypercholesterolemia. It also has the right to use lomitapide in the field of monotherapy or in combination with other dyslipidemic therapies for treatment of patients with other severe forms of hypercholesterolemia. The company distributes its product directly to patients and other purchasers through a specialty pharmacy.

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

AEGR

AEGR has been trending lower for most of the entire year. During the last 3 months the stock had held a clear level of support at $30, as well as forming prior $5 levels at $35 and $40 (red). With a market moving higher over the last year, AEGR has not been able to follow along and broke below $30 yesterday. This breakdown is not only a new 52-week low, but it’s also a break of a clear support level.

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The Tale of the Tape: AEGR has broken a key support level of $35, which was a 52-week low breakdown. This should signal lower prices ahead for the stock. A short trade could be entered on AEGR on a rally up to $30, with a stop set above that level. A break back above $30 would negate the forecast for a move lower and a long position could be considered instead.

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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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