Intercept Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics in the United States, Europe, and Canada. Its lead product candidate is obeticholic acid (OCA), a bile acid analog, which has a structure based on a naturally occurring human bile acid that selectively binds to and activates the farnesoid X receptor (FXR).
Take a look at the 1-year chart of Intercept (NASDAQ: ICPT) below with my added notations:
During the past couple of months, ICPT has formed an important level of resistance to watch at the $115 (red) mark. The stock almost tested that mark again last week. A close above that $115 level could mean a run up to the previous high, at minimum.
The Tale of the Tape: ICPT has a key level of resistance at $115. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $115.
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