BioMarin Pharmaceutical Inc. develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America, and internationally. Its commercial products include Naglazyme, a recombinant form of N-acetylgalactosamine 4-sulfatase enzyme for the treatment of mucopolysaccharidosis VI; Kuvan, a proprietary synthetic oral form of 6R-BH4 used to treat patients with phenylketonuria (PKU), a metabolic disease; Aldurazyme used for the treatment of mucopolysaccharidosis I, a genetic disease; Firdapse used to treat Lambert Eaton Myasthenic Syndrome, an autoimmune disease; and Vimizim, an enzyme replacement therapy to treat MPS IVA, a lysosomal storage disorder.
Take a look at the 1-year chart of BioMarin (Nasdaq: BMRN) with my added notations:
With the exception of a brief fake-out in June, BMRN has been range bound since April. Over that period of time the stock has formed a clear resistance at $65 (red) that had also been a prior support. In addition, the stock has also created a key level of support at $55 (green). At some point the stock will have to break one of the two levels that the consolidation has created.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: BMRN has clear levels of support ($55) and resistance ($65). The possible long positions on the stock would be either on a pullback to $55, or on a breakout above $65. The ideal short opportunity would be on a break below $55.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach