The most In Play stock this morning was SRPT. It is one of the crazier liquid biotech names from a price action standpoint to ever to grace our markets. Because of the strength of the news catalyst and the size of the reaction this morning it was at the top of our AM Game Plan. I decided for fun to poll the StockTwits & Twitter community on how high they potentially could see it trading today. There were 37 responses and the average price prediction was 39.514. All of the predictions were submitted prior to 9:30AM. SRPT’s trading high was 39.53. Nice crowd sourced prediction.

As I laid out my thoughts in our AM Meeting on possible price patterns for SRPT we looked at potential support and resistance areas as written in this snippet.

In the pre-market SRPT came close to 35 during our AM Meeting but when the market opened it was above 36. This provided a good opportunity for traders to observe if buyers could maintain control and push it up to pre-market resistance of 38 or possibly breakout to our first potential resistance around 39.30. As you can see from the below chart SRPT failed exactly at pre-market resistance before re-testing support at 36. By 10AM it had settled into a tight range with neither buyers or sellers asserting control. This provided a perfect setup for momentum traders to play a break of the range, and was the most profitable trade in SRPT for our desk today.

For tomorrow 38 will be a key are of support as it didn’t violate this level all afternoon.

Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, and options. He has traded professionally for 19 years. His email address is: [email protected].

no relevant positions