CARA (Cara Therapeutics Inc) was an unofficial trade idea that was first posted in the trading room back on Sept 19th, providing two very rapid & profitable long trades for gains of 33% & 21%. CARA reports earnings after the close today which could be the catalyst that sparks a gap or rally that leads to a breakout above this large symmetrical triangle pattern or a break below, which could send CARA back down towards the 4.40 double bottom lows or beyond.
CARA daily Nov 3rd
Entering a position just before earnings is nothing short of a purely speculative trade, particularly on a low-price stock with a market cap of only $170m. If CARA wasn’t scheduled to report tonight, I would add it as an official long trade idea here as prices are at the bottom of this large symmetrical triangle pattern (i.e.- support) with the MACD still indicating that the intermediate-term trend is bullish, with the MACD signal line (9-ema) above the zero line, albeit by the slightest margin.
While a speculative position or fractional position could be established here as a gamble on a positive earning report and/or guidance, the much safer play would be to wait to see how the stock trades tomorrow or in the coming days & possibly weeks. In additional to the uptrend & downtrend lines that form the symmetrical triangle pattern, all horizontal lines are key support & resistance levels which could act as price targets for either a long or short trade (the latter triggering on a breakdown and/or backtest of the bottom of the triangle pattern.