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Christian Tharp, CMT

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Five Star Biotech Stock Watch: Novavax

It isn’t a surprise to most that the biotech names have had a rough start to the year.

Really, March was pretty bad.

However, with the market recovering as of late, many of the beaten up biotech stocks have rebounded somewhat. A lot of analysts believe the rebound will continue.

As an investor, if you agree with those analysts, then it certainly wouldn’t hurt to look for the biotechs that are breaking back to levels they once held.

One in particular that broke back Tuesday was Novavax.

The company: Novavax, Inc.

Ticker Symbol: (NASDAQ: NVAX)

Sector: Healthcare

Industry: Biotechnology

Novavax, Inc. is a clinical-stage biopharmaceutical company that focuses on discovering, developing and commercializing recombinant protein nanoparticle vaccines and adjuvants.

Related: One Huge Step for MannKind?

The company’s vaccine technology platform is based on proprietary recombinant nanoparticle vaccine technology that includes virus-like particles vaccines and protein nanoparticle vaccines.

Take a look at the nine-month chart of Novavax with added notations:

Like most biotech stocks Novavax had a rough slide in March and April. One of the key breakdown points for the stock was when it fell below the all-important $5.00 mark.

Now that the stock has rallied higher from its $3.50 low, the stock has regained that prior $5 level and that level should hold it if the stock is continuing higher.

However, a break back below $5.00 will most likely signal lower prices instead.

The stock closed Tuesday at $5.13.

Related: Five Star Biotech Stock Watch: Biogen Idec

Novavax isn't set to release earnings again until August 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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