Amphastar Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development, manufacture, marketing, and sale of generic and proprietary injectable, inhalation, and intranasal products. The company’s product portfolio comprises Enoxaparin, Cortrosyn, Amphadase, Lidocaine and Primatene Mist HFA. Further, it has a pipeline of 21 generic and proprietary product candidates in various stages of development for various indications. The company’s products are used in hospital or urgent care clinical settings, and primarily contracted and distributed through group purchasing organizations and drug wholesalers.
Take a look at the 1-year chart of Amphastar (NASDAQ: AMPH) with the added notations:
While trading sideways, overall, during the past several months, AMPH has managed to bounce on top of the $17 support (green) several times. Now that the stock has fallen back down to that support area again, traders should be able to expect some sort of bounce. However, if the $17 support level breaks, lower prices should follow.
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The Tale of the Tape: AMPH has a key area of support at $17. A trader could enter a long position at $17 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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
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