Tuesday saw the market drop to the tune of almost 120 Dow points and nearly 13 S&P points.
But market sell-offs aren’t always a bad thing. After all, a pullback can provide a more ideal entry on a desired stock.
Thanks to the market rally over the last few weeks, a lot of stocks had broken up through key resistances. So Tuesday’s market sell-off could pull those stocks down to potential supports.
One stock that is inching closer to a potential support is the biotech firm, Celldex Therapeutics (NASDAQ: CLDX).
Celldex focuses on the development, manufacturing and commercialization of novel therapeutics for human health care primarily in the United States.
Its lead drug candidates include Rindopepimut (CDX-110), a targeted immunotherapeutic, and Glembatumumab Vedotin (CDX-011).
Here is a nine-month chart of Celldex with added notations:
Celldex had been bouncing along a trendline of support from November until mid-March.
After breaking that trendline, the stock lost about 60 percent of its value before finally finding a bottom near $10.
While forming a base, Celldex formed a solid level of resistance at $16, which the stock eventually broke above in early June. After stalling at $18, the stock is pulling back towards that prior level of $16.
The stock closed Tuesday at $16.92.
Celldex isn't set to release earnings again until July 31, 2014.
No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key.
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