Kythera Biopharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of prescription products for the aesthetic medicine market in the United States and internationally. Its product candidate ATX-101, is an injectable drug in late-stage clinical development for the reduction of submental fat. The company also maintains research interest in hair and fat biology, pigmentation modulation, and facial contouring. It has a collaboration arrangement with Bayer Consumer Care AG and a related collaboration agreement with Bayer Consumer Care AG’s affiliate, Intendis GmbH to develop and commercialize ATX-101 outside the United States and Canada.
Take a look at the 1-year chart of Kythera (NASDAQ: KYTH) below with my added notations:
KYTH rallied from October up until its March peak. From there, the stock has traded mostly sideways, with the exception of the May dip. Over the course of that sideways move KYTH has created an obvious resistance at that $52 level (red). A break above $52 should mean higher prices for the stock.
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The Tale of the Tape: KYTH has a key level of resistance at $52. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $52.
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