Swing trade $HRTX using SMA 200, simple guide

Swing trade set up: 200-day SMA bounce
Ticker: $HRTX


Condition 1: Traders of $HRTX respect the 200-day moving average
In the above 1 year chart, I noticed that traders respected the 200-day SMA as shown in the October to December period where the price tiptoed above $HRTX 200-SMA.  There appeared to be an increase is selling pressure during this period but the bulls held their ground and kept the price above the  the major support.

Condition 2: There is noticeable increase in volume
In the above chart, I noticed an increase in volume towards the end of September.  As with other trading strategies, any set up only works if the volume picks up or is atleast noticeably above average.  I also noticed that this is the same period when the downtrend pushed the price close to the 200-day SMA.

Trading Plan: $HRTX showed weakness starting August which resulted to a downward trend leading to its price touching 200-SMA in September.  Notice that as the price dropped, volume increased and a bounce off 200-day SMA appears to be setting up.  

The upside is that traders will respect the major support as they have in November and with the increase in volume, the price will bounce off 200-day SMA potentially resulting to a nice upside gains.

Trade Execution: Open properly sized position with stop loss at 2x ATR.  If the trade is right, exit position when upward trend is broken.  If the trade is wrong, stop loss will take me out of the losing trade at the predetermined loss.

Prediction: None


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