Pacira (NASDAQ: PCRX)

Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, commercializes, and manufactures proprietary pharmaceutical products primarily for use in hospitals and ambulatory surgery centers in the United States. The company develops pharmaceutical products based on its proprietary DepoFoam drug delivery technology. Its lead product includes, EXPAREL, a liposome injection of bupivacaine, an amide-type anesthetic indicated for infiltration into the surgical site to produce postsurgical analgesia.

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

PCRX has formed a clear support level at $30 (green) over the past six months. In addition, the stock is declining against a short-term, down trending resistance level (red). These two levels combined have PCRX stuck within a common chart pattern known as a descending triangle. Eventually, the stock will have to break one of those two levels.

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The Tale of the Tape: PCRX is within a triangle formation. A short trade could be made on a break of support or on a test of resistance. A long trade could be made at support or on a break through the triangle resistance.

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

@cmtstockcoach