Horizon Pharma PLC (NASDAQ: HZNP)

Horizon Pharma Public Limited Company, a biopharmaceutical company, engages in identifying, developing, acquiring, and commercializing medicines for the treatment of orphan diseases, arthritis, pain, and inflammation and inflammatory diseases in the United States and internationally.

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

1-year chart of Horizon (NASDAQ: HZNP)

HZNP is essentially sitting where it was 10 months ago. During that period of time, you can see that the level of $14 (blue) has commonly appeared as both support and resistance. The past few weeks have seen the stock rally back up to that $14 level again, thus presenting a potential trading opportunity.

The Tale of the Tape: HXNP has a key level at $14. 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 a rally back up to $14.

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