Radius Health, Inc., a biopharmaceutical company, focuses on developing therapeutics for patients with osteoporosis and other serious endocrine-mediated diseases in the United States. The company’s lead product comprises abaloparatide SC (BA058), a novel synthetic peptide analog of parathyroid hormone-related protein that is in Phase III clinical development for use in the reduction of fractures in postmenopausal osteoporosis; and Abaloparatide-TD, a line extension of abaloparatide-SC in the form of a transdermal patch that has completed Phase II clinical trial, which is used to increase bone mineral density.
Take a look at the 1-year chart of Radius (NASDAQ: RDUS) below with added notations:
RDUS embarked on an amazing rally in August of 2014, which took the stock all the way up to a high at $50 in February. From there, the stock hit $50 as resistance several more times forming a solid 52-week high resistance at $50 (green). Yesterday the stock broke through that level on strong volume, which should lead to higher prices overall.
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The Tale of the Tape: RDUS broke its 52-week resistance at $50. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $50 could negate the forecast for a move higher.
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