ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD)

ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of small molecule drugs that address unmet medical needs in central nervous system disorders. Its lead product candidate, NUPLAZID, has completed the Phase III pivotal trials for the treatment of Parkinson’s disease psychosis and the Phase II trial for the treatment of schizophrenia, as well as is in Phase II study for the treatment of Alzheimer’s disease psychosis.

Take a look at the 1-year chart of Acadia (NASDAQ: ACAD) below with the added notations:

1-year chart of Acadia (NASDAQ: ACAD)

ACAD had been in downward move before bottoming out in the beginning of the year. Since that bottom, the stock has more than doubled in price. Now, the $35 level (blue) has become key to higher prices. A break above that $35 mark should lead to another leg up for the stock.

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The Tale of the Tape: ACAD has a key level at $35. A trader could enter a long position on a break above that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on any rallies back up to $35.

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