Novocure Ltd (NASDAQ: NVCR)

Novocure Ltd. operates as an oncology company. It engages in developing its propriety technology, Tumor Treating Fields, which uses electric fields tuned to specific frequencies to disrupt cancer cell division, inhibiting tumor growth, and causing affected cancer cells to die.

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

1-year chart of Novocure (NASDAQ: NVCR)

NVCR had been trading somewhat sideways since the beginning of June, while repeatedly stalling at the $32 level (green). That level was also NVCR’s 52-week high resistance barrier, and now that the stock has broken above it, traders could look to enter a position on a pullback down to the $32 area.

The Tale of the Tape: NVCR broke its 52-week resistance at $32. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $32 could negate the forecast for a move higher.

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