Atara Biotherapeutics Inc (NASDAQ: ATRA)

Atara Biotherapeutics, Inc., an off-the-shelf T-cell immunotherapy company, develops treatments for patients with cancer, autoimmune, and viral diseases in the United States.

Take a look at the 1-year chart of Atara (NASDAQ: ATRA) with the added notations:

1-year chart of Atara (NASDAQ: ATRA)

During the past eighth months, ATRA had formed a very important level of support at $35 (green). Earlier this week saw the stock break below that support. Not only does that imply lower prices for ATRA, but the $35 level should act as resistance on future rallies, as it has during the past several days.

The Tale of the Tape: ATRA broke a key level of support at $35. A trader could enter a short position on any rallies up to or near $35 with a stop placed above the level. If the stock were to break back above the $35 level, a long position might 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!

Good luck!

Christian Tharp, CMT