Great News For Biogen, But What's Next For The Stock?
The market was up nicely on Tuesday, but the biotech industry was up even more.
Another biotech stock, Biogen Idec, was up more than 6 percent yesterday, but on a positive news development rather than just because the whole industry was higher.
Biogen popped after the company said its experimental drug to treat Alzheimer’s showed promise in an early-stage trial and that it would now be moved to phase 3 trials.
The question for investors now is whether or not Biogen has more room to run. The analysis of the stock below should help to answer that question.
The company: Biogen Idec Inc (NASDAQ:BIIB)
Sector: Health care
Biogen Idec discovers, develops, manufactures and markets therapies for the treatment of multiple sclerosis, neurodegenerative diseases, hemophilia and autoimmune disorders.
Related: Here’s The Latest Biotech Breakout
The company has collaboration agreements with Genentech, Inc., Acorda Therapeutics, Inc., Sangamo BioSciences and Swedish Orphan Biovitrum AB.
Review the one-year chart of Biogen with the added notations:
Thanks to the recent good news, Biogen has broken out of its down-channel, which is certainly a plus for the stock.
However, the stock is now approaching its prior trendline of support, and that trendline has already been tested on two prior occasions as resistance. So, the trendline still matters.
A push above that trendline should lead to a run up to the $350 level, and a break above that mark probably means a new high.
Unfortunately, a fall back into the down channel would be a bearish sign for Biogen.
The stock closed Tuesday at $328.27.
Image credit: Sergei Golyshev, Flickr
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.