Incyte Corporation (NASDAQ: INCY)

Incyte Corporation focuses on the discovery, development, and commercialization of proprietary therapeutics in oncology. It offers JAKAFI for the treatment of myelofibrosis and polycythemia vera cancers. Its clinical stage products include ruxolitinib cream, which is in Phase II clinical trial for the treatment of alopecia areata; and INCB52793, which is in Phase I/II for the treatment of advanced malignancies.

Take a look at the 1-year chart of Incyte (NASDAQ: INCY) below with my added notations:

INCY

INCY appears to have been forming a base of some kind over the past several months, while also forming a key level of resistance to watch at $85 (red). INCY has already tested that level twice, and it looks like it’s going to do it again soon. A break above that $85 level should lead to higher prices, most likely the $90 level from last year, at minimum.

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The Tale of the Tape: INCY has a key level of resistance at $85. 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 $85.

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