The set-up: Karyopharm Therapeutics Inc. (KPTI) is a clinical-stage biotech focused on therapies for blood cancers. It’s on my radar because they have Phase 2-3 top-line data coming out this fall for a liposarcoma indication on their lead drug, selinexor. Another interesting catalyst is a Phase 2b trial study on selinexor in multiple myeloma, due next April. Another good sign is that analysts at Jefferies Group recently reiterated their “buy” rating on KPTI with a $19 price target, up from $16.

What’s on the chart: KPTI has pulled back pretty significantly since mid-April. On March 2, it hit a high of $13.84, but then the stock got pummeled by a failed selinexor trial for a different indication, and a brief clinical hold imposed by the FDA. Since the beginning of August, it’s been bouncing right above support at $8. It pulled back down to $8.11 on Monday, and then popped up. It looks to me like it could run over $10, maybe to $11, in the next four weeks or so.

How I may play it: I think there should be one more dip back down. On Thursday, it sneaked up when I wasn’t looking, and closed at $9.01. If it falls back down to $8.50, I’d be really interested in picking up a starter position.

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Kyle Dennis runs Kyle Dennis’ Biotech Breakouts (biotechbreakouts.com). He is an event-based trader, who prefers low-priced and small-cap biotech stocks. He currently has no shares, options or open orders in KPTI; he last held the stock on June 24, 2016, when he played it as a day trade.

Author: Kyle Dennis

Straight outta college Kyle Dennis taught himself to trade, and then made over $7 million in trading profits by the time he was 28 years old. Kyle reveals how to find, track, and profit from lucrative trades for exceptional profits. Thousands of traders follow him every day to learn how to target these high probability trades.

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