Arrowhead Research Corporation develops novel drugs to treat intractable diseases in the United States. The company’s principal product candidates comprise ARC-520, an RNAi-based therapeutic that is in Phase IIa clinical trial to treat chronic hepatitis B virus infection; and ARC-AAT, a novel unlocked nucleobase analog containing RNAi-based therapeutic for the treatment of liver disease associated with alpha-1 antitrypsin deficiency. Its platform technology include Dynamic Polyconjugate platform, an RNAi delivery system that addresses multiple organ systems and cell types. The company is also involved in the development of Adipotide, which is in phase I clinical trial for the treatment of obesity and metabolic disorders; and CRLX-101 that is in phase II clinical trial to treat various cancer types, including relapsed renal cell carcinoma, relapsed ovarian cancer, and non-metastatic rectal cancer. It has research collaboration and license agreement with Shire AG to develop and commercialize targeted peptide-drug conjugates.
Take a look at the 1-year chart of Arrowhead (NASDAQ: ARWR) with the added notations:
ARWR fell off a cliff in October of 2015, but the stock finally found a bottom in December, eventually finding support at $6.00 (green). ARW has hit that support level multiple times so far this year, and now that the stock is testing that support level once again. Traders could expect some sort of bounce, but if the $6.00 support were to break, lower prices should follow.
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The Tale of the Tape: ARWR has an important level of support at $6.00. A trader could enter a long position at $6.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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