Five Star Stock Watch: Sarepta Therapeutics

After trending lower for the last couple of months, Sarepta Therapeutics surged 39.3 percent after announcing plans to file for a new drug application (NDA) for their lead drug eteplirsen later this year.

You see, Sarepta had been told last year by the Food and Drug Administration (FDA) that its current phase 2 data would be insufficient for an early new drug application filing.

However, just like that, the FDA seems to have made an about face with Sarepta announcing the potential to file an NDA this year. Have investors missed the boat on this news?

The company: Sarepta Therapeutics, Inc

Ticker Symbol: SRPT

Sector: Healthcare

Industry: Biotechnology

Sarepta Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery and development of RNA-based therapeutics for the treatment of rare and infectious diseases. 

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In addition, it focuses on developing preclinical research product candidates for the treatment of other neuromuscular, infectious, and rare diseases.

Please take a look at the one-year chart of Sarepta below with added notations:

As you can see from the chart above, Sarepta jumped big time on the NDA news on Monday.

But, after opening near $40, the stock fell throughout the rest of the day and eventually closed near $34.

If investors are looking for an opportunity to get in the stock, and if the profit taking continues, the level of $30 has been very important to Sarepta. A hold of that level would be expected unless this news has led to a false breakout. 

Related: Five Star Stock Watch: Freeport McMoran

Sarepta is set to release earnings on May 29, 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.