Set-ups don’t get much better than this. OPHT – Ophthotech, a Biotech stock, just put in an all time high close. As you can see in the chart annotations the move started with a huge gap up and then the stock ran up on huge volume. This is the hallmark of a bullish break-away gap marking the beginning of a potentially long lasting run-up. Make no mistake, if this is indeed a break-away gap, the gap won’t get filled. It is tough to tell exactly when a set-up like this can start to run without offering the easy entry. An all time high is a great clue a relentless run-up could happen anytime. Almost everybody is in the green and the overall pattern pressure is there. From a purely technical perspective this is the best signal you could wish for. There are no guarantees but when chart set-ups like these come along I go for it. Then I manage my risk. Act accordingly.
Click on chart to enlarge:
Yahoo finance company description:
Ophthotech Corporation, a biopharmaceutical company, develops novel therapeutics to treat diseases of back of the eye. Its principal product candidate, Fovista, is in Phase 3 clinical development for use in combination with anti-VEGF drugs for the treatment of wet age-related macular degeneration (AMD). The company is also developing Zimura, an inhibitor of complement factor C5, for the treatment of dry and wet forms of AMD. The company was founded in 2007 and is based in New York, New York.
Two nice quotes from Peter L. Brandt: “Diary Of A Professional Commodity Trader – Lessons From 21 Weeks Of Real Trading” on page 113 and 116, that are related to pattern interpretation:
Markets most often provide signals when the real moves begin. Waiting for substantial patterns to become complete is where the profits are to be found. – Peter L. Brandt
The longer I need to examine a chart, the less likely the market in question is offering a trading opportunity. For me, signals are patently obvious. Whether they will be profitable is another matter. – Peter L. Brandt
Twitter: https://twitter.com/Tischendorf
Investing in your education always pays. Learn how to read chart patterns like a pro! Tischendorf Letter Premium: https://members.tischendorf.com