Myriad Genetics, Inc. (NASDAQ: MYGN)

Myriad Genetics, Inc., a molecular diagnostic company, focuses on the development and marketing of predictive, personalized, and prognostic medicine tests in the United States and internationally. The company operates through three segments: Research, Molecular Diagnostics, and Pharmaceutical and Clinical Services. The company’s molecular diagnostic tests are designed to analyze genes; diagnose diseases, expression levels, and proteins to assess an individual’s risk for developing disease later in life; determine a patient’s likelihood of responding to a particular drug; and assess a patient’s risk of disease progression and disease recurrence.

Take a look at the 1-year chart of Gilead (Nasdaq: MYGN) below with my added notations:

1-year chart of Gilead (Nasdaq: MYGN)

MYGN has formed a solid resistance at $40 (red), which would also be a 5-month high if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (blue) over the last 4+ months.

These two levels combined have MYGN stuck within a common chart pattern known as an ascending triangle. Eventually, the stock will have to break one of those levels. A break above $40 would most likely lead to a test of the $42.50 high (green)

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The Tale of the Tape: MYGN has an uptrending support and a $40 resistance level to watch. A long trade could be made on a pullback to the trendline, or on a breakout above $40. A break below the uptrending support would be an opportunity to enter a short trade.

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