We're seeing a similar setup in shares of Dublin-based biotech firm Alkermes (ALKS - Get Report). The key difference in ALKS is that the breakout has already happened -- but that doesn't change the trading implications in this stock right now.
Alkermes broke out above a significant resistance level right at the start of the year, and it's been forming a throwback ever since. A throwback happens when a stock moves back down to test newfound support at its former breakout level -- in this case at $20.50. And while throwbacks look ominous, they're actually constructive for stock prices because they re-verify the stock's ability to catch a bid at support. For that reason, it's best to think of a throwback as a second chance at a low risk entry in ALKS.
Right now, shares are just starting to stage a bounce off $20.50. We could see confirmation of that bounce in today's trading session. I'd recommend being a buyer on the next white bar day with a stop on the other side of $20.50.