HRTX – Short At Top of Range…

The drug manufacturing sector has not been on fire and we don’t think that will change going into 2018. Heron Therapeutics, Inc. (HRTX) is a stock within this sector at a good short location. Please observe the chart below.

Looking at the daily chart of HRTX, one would have to agree that the stock has “splashy” character. In fact it spent the entire year making “V” reversals at the top and bottom of two six month ranges.

Yesterday, HRTX closed at the top of the most recent price range. Given the pattern of “V” reversals continues, traders can look for a return to the bottom of the range over the next 1-2 weeks. Using the stop over last month’s high (18.50), even a return to just the middle of the current range provides a nice reward to risk ratio if a position is initiated above the mid of yesterday’s price range. Preferably, we’d like to see the opportunity to enter around the 18.00 level.

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