Beyond The Biotech Space - Radian Group, Inc. (NYSE: RDN)

RDN retests

RDN was on a nice trend higher from August until it’s December peak, but then the stock started a sideways move.

In addition, twice over the last 5 months the stock had hit a level of resistance at $17.50 (green). That resistance level was also a 52-week high resistance. Back in mid-April RDN finally broke to a new high, and now that same $17.50 level provided support for the stock during Friday’s pullback.

The Tale of the Tape

RDN broke out to a new 52-week high. A long trade could be made near $17.50 with a stop placed below that level. A break back below $17.50 would negate the forecast for a continued move higher.

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

@TraderBiotech

Posted to The Biotech Trader on May 04, 2015 — 9:05 AM
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