Alexion Pharmaceuticlas (ALXN) has rallied over the past several days following a breakdown through the neckline of a head and shoulders formation seven trading days ago. The current rally has brought the stock into the 87-88 range, roughly near or at the neckline and resistance in the 90 price area. In conjunction with the general market rolling over, should that happen, ALXN is shortable here using 90 as your upside guide for a stop, but in general we would allow for no more than 3-5% upside for a stop.
Keep in mind that short-sale targets will generally be more successful in the event of a market rally failure, as continued upside in the indexes can easily drag a short-sale target up further into its pattern. In this case, ALXN could rally up closer to the 90 price area, but objectively it remains within shorting range of this resistance level based one one's personal risk-tolerance and risk-preferences.
Fair Disclosure: We are currently short the stock, but could be in and out of the position depending on the action of the general market and the stock itself.
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