Abiomed, Inc. engages in the research, development, and sale of medical devices to assist or replace the pumping function of the failing heart. It also provides continuum of care to heart failure patients.
Take a look at the 1-year chart of Abiomed (NASDAQ: ABMD) with the added notations:
Over the past two months, ABMD had formed a very important level of support at $180 (red). Yesterday saw the stock break below that support. Not only does that imply lower prices for ABMD, but the $180 level should now act as resistance on any future rallies.
The Tale of the Tape: ABMD broke a key level of support at $180. A trader could enter a short position on any rallies up to or near $180 with a stop placed above the level. If the stock were to break back above the $180 level, a long position might 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!
Christian Tharp, CMT