Another stock that's starting to push within range of triggering a near-term breakout trade is Ironwood Pharmaceuticals ( IRWD), an entrepreneurial pharmaceutical company that discovers, develops and intends to commercialize differentiated medicines that improve patients' lives. This stock has been hammered by the bears over the last three months, with shares plunging by 40%.
If you look at the chart for Ironwood Pharmaceuticals, you'll notice that this stock has been downtrending badly for the last four months, with shares plunging from its high of $19.67 to its recent low of $9.83 a share. During that downtrend, shares of IRWD have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of IRWD have started to bounce off that $9.83 low and it's now quickly moving within range of triggering a near-term breakout trade.Traders should now look for long-biased trades in IRWD if it manages to break out above some near-term overhead resistance levels at $10.81 to $11 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 1.28 million shares. If that breakout triggers soon, then IRWD will set up for a powerful bounce higher and possible reversal of its recent downtrend. Some possible upside targets off that breakout are $13.50 to $14 a share, or even $16 a share. Traders can look to buy IRWD off any weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $9.83 a share. One can also buy IRWD off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV