ABIOMED, Inc. engages in the research, development, and sale of medical devices to assist or replace the pumping function of the failing heart.

Take a look at the 1-year chart of ABIOMED (Nasdaq: ABMD) below with my added notations:

1-year chart of ABIOMED (Nasdaq: ABMD)

ABMD has been climbing higher for the past year. During the most recent couple of months, the stock has created key price levels at the increments of $50 (blue). The $450 mark is the current high, the $400 level was both support and resistance, while the current support seems to be $350.

The Tale of the Tape: ABMD is sitting at its key level of $350. A long trade could be made at that level with a stop placed under it. A short trade could be made on a break below $350, or on a rally up to $400.

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