Simple Support and Resistance Grid for MannKind MNKD

Jul 24, 2015: 2:16 PM CST

A couple readers have asked me to chart MannKind (MNKD) – a low priced but high volume stock – and indeed shares are facing a key support level here.

Let’s pinpoint the current “simple support and resistance” levels and note what opportunities develop from these levels.

We’ll start with the Daily Chart:

First and foremost, price is in a volatile, wide sideways trend.

Simple Support and Resistance Levels (colored) align at the $5.00 and $5.75 per share zones.

These aren’t just arbitrary levels – let’s broaden our perspective to the current Fibonacci Retracement Grid:

To be precise, the $5.00 per share level (where we are now) is the 61.8% Fibonacci Retracement of the recent swing up as drawn.

The $5.90 per share –  just shy of $6.00 – is the 38.2% Fibonacci Retracement.

The Midpoint or Magnet of the Swing is of course $5.50 per share.

The volatility – and buying pressure of traders – has twice fueled a powerful rally up to the $7.50 per share level in 2015.

The down-break away from $5.00 to a reversal just under $4.00 also reminds us of the wider range and higher volatility of this aggressive trading candidate.

So what’s the simple play here?

A trigger-breakdown under the $5.00 per share level – use April 2015 as the model for a potential sell-price pathway – could lead to a sell swing down toward the $4.00 per share level.

Otherwise, note the yellow “Neutral Zone” between the $5.00 and $5.75 pivots.

Build trading strategies on the movement away from the $5.00 pivot or reference level.

Short-sell breakdown strategies are appropriate under $5.00; support-bounce or range trading strategies are appropriate between $5.00 and $6.00 per share.

Finally, in the event that buyers once again break price beyond $6.00, that’s when bullish breakout plays would be favored.

Until then, focus all attention on $5.00 per share and the Red Sell Zone beneath this support shelf.

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Corey Rosenbloom, CMT
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2 Responses to “Simple Support and Resistance Grid for MannKind MNKD”

  1. Hina Says:

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  2. Mathur Says:

    I really like to work with support and resistance way, as that is very useful while we of course need to take care of the money management, as that’s the key potion here, if we get that right then we could make it big, but if we are unable to get it right then we might struggle. I always use strict money management and that has helped me quite a bit with any way of trading especially with help of OctaFX broker using their 50% bonus on deposit.