BAK bounces again

Unlike most energy related stocks, BAK actually hasn’t hit a new low recently. However, the stock’s trend does look like its peers within the energy sector, which is down. Over the past 5 months BAK has formed a key support level at $6.50, while also forming a trendline of resistance since November. At some point, one of those two lines will have to break.

The Tale of the Tape:

BAK has an important level of support at $6.50. A trader could enter a long position at $6.50 with a stop placed under the level, or on a break through the trendline resistance. If the stock were to break below the support a short position could 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!

The Biotech Trader

@cTraderBiotech