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RDUS Swing Trade Setup

RDUS (Radius Health Inc) will trigger a entry on any break above 28.72. On November 14th, this biotech company fell to long-term support (24.66) while deeply oversold. As shown on the daily chart below, all prior oversold readings in recent years were followed by rallies ranging from 14% to over 140%.

RDUS daily Nov 28th

RDUS daily Nov 28th

The entry on this long-side swing trade is based off the 60-minute chart, just above the 28.71 resistance level. Radius recently broke above the 60-minute downtrend line, followed by a successful backtest & appears poised for another thrust up towards the next resistance level around 30.50 once the 28.71 level is taken out with conviction. RDUS also appears to have potential as a bottoming play for longer-term trend traders & investors. Price targets for this trade are T1 at 30.43, T2 at 31.97 & T3 at 33.34. The maximum suggested stop is any move below 27.19. The suggested beta-adjusted position size is 0.90.

RDUS 60-min Nov 28th

RDUS 60-min Nov 28th

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Nov 28, 2017 9:47am|Categories: Completed Trades - Long|Tags: |2 Comments

2 Comments

  1. rsotc November 28, 2017 9:56 am at 9:56 am

    Entry just triggered, RDUS is now an active trade. Best to use limit orders vs. market orders as this is a somewhat thinly traded stock.

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    • rsotc November 28, 2017 10:11 am at 10:11 am

      As a follow-up to the suggestion to use limit orders vs. market orders if trading RDUS or any thinly traded stock. Example: RDUS at 28.80 x 28.88 right now (bid 28.80, ask 28.88). I’ll usually split the difference by about 2/3rds, placing my limit order closer to the ask price if I’m looking to buy, especially if the stock is rising such as RDUS is so far today since the breakout. As such, I might place my order at 2.85 or 2.86 in this example.
      One other option for those that use Interactive Brokers, is their adaptive IBALGO order entry. This is essentially a market order but they use some type of algorithm to fill the order at the best price. The benefit of this order type over a limit order when trying to buy a fast moving stock after a breakout is that you don’t have to keep modifying your limit order if the stock is climbing & it wasn’t filled. With the IB adaptive orders, you can even set the priority for the order as normal, urgent or patient. I’ve found that normal usually works well but urgent is best on a very fast moving stock following an impulsive breakout.

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