Alkermes Plc is a biopharmaceutical company, which engages in the development, research, and commercialization of medicines that are designed to address unmet medical needs of patients in major therapeutic areas. Its products include Aristada, which is used for the treatment of schizophrenia in adults; and Vivitrol, which is an injectable medication for the treatment of alcohol dependence and for the prevention of relapse to opioid dependence, following opioid detoxification.
Take a look at the 1-year chart of Alkermes (NASDAQ: ALKS) below with the added notations:
Over the course of the past 7 months, ALKS has formed an important level to watch at the $17 (blue) mark. That level was support in October, January and February, before breaking down, and then it was resistance just last month. ALKS is currently right below $17, which could mean a test of resistance is coming.
The Tale of the Tape: ALKS has a key level at $17. A trader could enter a long position on a break above that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a test of the $17 mark.
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