Price Support on SRPT stock The weight placed on this one breakthrough drug is so heavy that it is causing wild and erratic swings in SRPT stock. Fundamental data can give little guidance or clarification for the pricing action. In such circumstances, technical analysis is the only tool that can be used effectively, because this style of analysis is strictly based on price.
The Sarepta stock chart above illustrates that $40.00 is a major price level, and I have to believe that this price level will act as support. This price level acted as resistance for three years, and it took four attempts to finally break above this level.
When a major level of resistance is broken, it becomes a new level of support, and it is very common for a price to return to this level and test it from above. Traders refer to such price action as a backtest, and it acts to reaffirm that this new level is indeed an new level of support. On average, a price will find support at this level and proceed to move in the opposite direction, which is higher.
Not only does this level provide support, but the Fibonacci numbers are alluding that this retracement is within the confines of a primary bull market move, and that the trend higher in Sarepta stock can resume. This level represents an excellent opportunity from a risk/reward perspective. I could incorporate a trading strategy at this price point, which would incorporate a level of risk that I believe is suitable to my needs, and then go long on SRPT stock.Click here for reuse options!