Radius Health Inc (NASDAQ: RDUS)

Radius Health, Inc., a biopharmaceutical company, develops and sells therapeutics in the areas of osteoporosis, oncology, and endocrine diseases primarily in the United States. Its lead product comprises Abaloparatide-SC, a novel synthetic peptide analog of parathyroid hormone-related protein, which has been completed Phase III clinical development for the treatment of patients with postmenopausal osteoporosis; and Abaloparatide-TD, a transdermal patch that has been completed Phase II clinical trial, which is used as a short wear-time transdermal patch.

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

1-year chart of Radius

Over the past 3 months, RDUS has hit the $40 resistance area (red) on 3 separate occasions. In addition, the stock has been climbing a trend line (TL) of support (green) since the beginning of May. Together, these two lines have formed an ascending triangle on RDUS. Eventually, the stock will have to break either the $40 resistance or the triangle support.

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The Tale of the Tape: RDUS is winding up between two key levels. A long trade could be made at the triangle support or on a break above $40. A break below the trendline would be an opportunity to enter a short trade.

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