Amicus Therapeutics, Inc., a biopharmaceutical company, develops and commercializes therapeutic products for rare and orphan diseases. Its product candidate is a small molecule that can be used as a monotherapy and in combination with enzyme replacement therapy (ERT) for Fabry disease. The company’s development programs include next-generation ERTs for lysosomal storage disorders (LSDs), such as Fabry disease, Pompe disease, and Mucopolysaccharidosis Type I. It also develops pharmacological chaperone migalastat HCl as a monotherapy that has completed two Phase III global registration studies for Fabry disease; ATB200, a recombinant human acid-alpha glucosidase that is in late preclinical development for Pompe disease; and AT3375 for the treatment of Parkinson’s disease.
Take a look at the 1-year chart of Amicus (NASDAQ: FOLD) with the added notations:
FOLD had been rallying to new highs before falling off a cliff towards the end of September. After that drop, the stock tested the $6 level (red) as support on multiple occasions, thus creating a very important 52-week low support at that mark. Now that the $6 level has been broken, the stock should be taking another step lower.
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The Tale of the Tape: FOLD broke a key level of support at $6. A trader could enter a short position on any rallies up to or near $6 with a stop placed above the level. If the stock were to break back above the $6 level, a long position might 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