Myriad Genetics, Inc., a personalized medicine company, focuses on the development and marketing of predictive, personalized, and prognostic medicine tests worldwide. It operates through two segments, Diagnostics and Other. The Diagnostics segment primarily provides testing and collaborative development of testing that is designed to assess an individual’s risk for developing disease; identify a patient’s likelihood of responding to drug therapy; guide a patient’s dosing to ensure optimal treatment; and assess a patient’s risk of disease progression and disease recurrence. The Other segment provides testing products and services to the pharmaceutical, biotechnology, and medical research industries; and research and development, and clinical services for patients.
Take a look at the 1-year chart of Myriad (NASDAQ: MYGN) below with added notations:
MYGN had been trading sideways for the past two months. During that period of time, the stock formed a clear resistance level at $22 (blue) and a strong level of support at $20 (red). At some point the stock had to break one of the two levels created by the rectangle pattern, and earlier this week the stock broke support.
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The Tale of the Tape:: MYGN had a level of support at $20, the stock broke that support, and now that level should act as resistance. The ideal short opportunity would be at or near that $20 level. On the other hand, one could enter a long position on a break back above that level.
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