Mirati Therapeutics, Inc., a clinical-stage oncology company, develops product candidates to address the genetic and immunological promoters of cancer in the United States.
Take a look at the 1-year chart Mirati (NASDAQ: MRTX) below with my added notations:
MRTX had formed a key level of resistance at the $80 level (green) back during the first quarter of this year. The stock broke through that resistance in May, but now, three months later, the stock appears to be set to test that old $80 resistance as a new support.
The Tale of the Tape: MRTX has an old $80 resistance that should now act as support, thus a long trade could be entered on a pull back down to that level. However, a break back below $80 could 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!
Christian Tharp, CMT