Sarepta Therapeutics, Inc. is a commercial-stage biopharmaceutical company, which is engaged in the discovery and development of therapeutics for the treatment of rare diseases.
Take a look at the 1-year chart of Sarepta (NASDAQ: SRPT) with the added notations:
Between December and February, SRPT had formed an important level of support at $100 (red). A selloff that started before the market correction has seen the stock break below that support. Not only did that imply lower prices for Sarpeta, but the $100 area will now likely act as resistance on future rallies, as it has several times over the past week.
The Tale of the Tape: SRPT broke a key level of support at $100. A trader could enter a short position on any rallies up to or near $100 with a stop placed above the level. If the stock were to break back above the $100 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!
Christian Tharp, CMT