Bristol Myers Squibb Co. (BMY) engages in the discovery, development, licensing, manufacture, marketing, distribution, and sale of biopharmaceutical products. It offers chemically-synthesized drugs or small molecules and products produced from biological processes called biologics…
Take a look at the 1-year chart of BMY below with added notations:
BMY has been chopping its way higher over the past year, while recently forming a key resistance at $68 (green). Now that the stock has broken above that level, while also hitting a new 52-week high, overall higher prices should be coming. If BMY pulls back, the $68 level should provide support.
The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A failure to hold $68 could negate the expectations for a higher move.
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