Prothena Corporation plc, a late-stage clinical biotechnology company, focuses on the discovery, development, and commercialization of novel immunotherapies for the treatment of diseases in the neuroscience and orphan categories.
Take a look at the 1-year chart of Prothena (NASDAQ: PRTA) below with the added notations:
Over the course of the past four months, PRTA has made several swings, both higher and lower. Commonly, the level of $35 (blue) has provided the support or resistance for those moves. Now that PRTA seems to be pulling back, the $35 level should provide support yet again.
The Tale of the Tape: PRTA has a key level at $35. Traders could enter a long position on a pullback down to $35, with a stop placed under the level. However, traders that are bearish on the stock might have an opportunity to get short if PRTA were to break back below $35 again.
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