Radius Health Inc (NASDAQ: RDUS)

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 my added notations:

1-year chart of Radius (NASDAQ: RDUS)

RDUS has been trending lower since mid-July. Over that time, the stock has formed a trend line of support (green). Any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. RDUS seems to have an important trendline of support, which currently sits right around $33. So, it appears the stock is close to getting a bounce, but a break below that line would most likely mean lower prices for the stock.

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The Tale of the Tape: RDUS is getting close to a down trending support. Traders could look to get long the stock with a stop set below the trendline. However, if RDUS were to break the trendline, short traders should take notice.

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