First up is $7 billion specialty pharmaceutical company Salix Pharmaceuticals (SLXP), a name that's been a strong performer in 2014. Since the calendar flipped to January, Salix is up nearly 25%. And after dragging along sideways since the start of March, Salix looks ready to launch on another leg higher. Here's how to trade it.
Salix is currently forming an ascending triangle pattern, a bullish price setup that's formed by a horizontal resistance level above shares at $117 and uptrending support to the downside. Basically, as SLXP bounces in between those two technically significant price levels, it's getting squeezed closer to a breakout above that $117 price ceiling. When that happens, we've got a buy signal in this drug maker.
Relative strength adds some extra confidence to an upside trade in SLXP. Since October, this stock's relative strength line has been holding an uptrend, an indication that Salix is outperforming the broad market in good times and in bad ones.
Wait for $117 to get taken out before putting money on this name.