NewLink Genetics Corp (NASDAQ: NLNK)

NewLink Genetics Corporation, a biopharmaceutical company, focuses on discovering, developing, and commercializing immunotherapeutic products to enhance treatment options for patients with cancer. Its portfolio includes biologic product candidates based on its HyperAcute immunotherapy technology, which is designed to stimulate the human immune system; and small-molecule product candidates that are focused on breaking the immune system’s tolerance to cancer by inhibiting the indoleamine-(2,3)-dioxygenase (IDO) pathway.

Take a look at the 1-year chart of NewLink (Nasdaq: NLNK) below with added notations:

1-year chart of NewLink (Nasdaq: NLNK)

NLNK has formed a clear resistance at $42 (red), which would also be a 10-month high breakout if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (green) over the last 2 months. These two levels combined have NLNK stuck within a common chart pattern known as an ascending triangle. Eventually, the stock will have to break one of those levels.

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The Tale of the Tape: NLNK has an uptrending support and a clear $42 resistance level to watch. A long trade could be made on a pullback to the support, or on a breakout above $42. 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