Opko Health Inc. (NASDAQ: OPK)

Opko Health, Inc., a healthcare company, engages in the diagnostics and pharmaceuticals business in the United States, Ireland, Chile, Spain, Israel, and Mexico. The company’s Diagnostics segment operates Bio-Reference Laboratories, a clinical laboratory that offers laboratory-testing services in the detection, diagnosis, evaluation, monitoring, and treatment of diseases. The company’s pharmaceutical segment offers Rayaldee, a treatment for secondary hyperparathyroidism in adults with stage 3-4 chronic kidney disease patients with vitamin D deficiency; and VARUBI for chemotherapy-induced nausea and vomiting.

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

1-year chart of Opko (NASDAQ: OPK)

Since peaking last December, OPK seems to have formed a clear, trend line of resistance (red). Any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. A break above that line should mean higher prices, overall, for the stock, while a break of the $6 support (green) likely means lower lows to follow.

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The Tale of the Tape: OPK has a key support at $6 and a down trending resistance line. A break above that resistance should mean higher prices for the stock, thus a long trade could be made. A break of support should lead to lower prices, which would be an opportunity to get short the stock.

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