BMRN breaks down

Over the past year BMRN has been slowly climbing higher. During that time the stock had also formed a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it’s the 3^rd test and beyond that confirm its importance. BMRN’s trendline is definitely important. Yesterday the stock broke that trendline, while also breaking its key level of $132 (green).

The Tale of the Tape:

BMRN has broken below trend line support and its key level of $132. A short position could be entered on a rally up to the trendline, which is currently near the $132, with a stop placed above that level. A long position could be entered if BMRN were to break back above the trendline.

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