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Answers - Trading On Support And Resistance Levels
The concept of support and resistance is extremely interesting, and one which will help you considerably in the timing of your trading decisions. Yet it is a very simple concept to grasp. Support and resistance are basic tool
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
s used by traders to identify key reversal areas. As the names suggest support acts to keep the price above a certain level, whilst resistance acts to keep a share's price below a certain level. Drawing support and resistance
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
lines on charts, allows us not only to determine where these levels are, but also to consider future price movement in relation to them. Oh and don't worry, all charting packages have the facility to draw lines on the screen
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
Firstly, let me try to explain how and why these levels arise. Imagine a price is moving up and then subsequently starts moving down again. At the turning point there will be many buyers trapped who did not sell before pric
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
s moved down, and have decided to wait until the price moves back up again before selling ( they are living in hope ! ) Let us assume now that the price has stopped falling, and has started rising again. As it nears the point
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
at which it turned the first time, those trapped buyers breath a sigh of relief and sell at breakeven or slightly less, which forces the price back down again as there is now more selling pressure than buying pressure. Natura
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ly in the up move there has been buying, and these buyers now become trapped as prices move back down again. Now this can be repeated many times over, and you will see many different instruments including shares that behave i
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
this way. In some cases this price action can last days, weeks or even months.
At the point where prices were falling and then started rising, exactly the same thing is occurring, but in reverse of course. We now have short
At the point where prices were falling and then started rising, exactly the same thing is occurring, but in reverse of course. We now have short
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
sellers who are trapped at the bottom and have to wait for the price to come back down to them, who gratefully close their positions when this happens, to be replaced by more short sellers who are then trapped in turn..... -
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
think you get the picture.!!
When this price action happens, it has several consequences. Firstly it produces what we call a channel and the instrument is said to be channeling ( or range trading ). The prices form a define
When this price action happens, it has several consequences. Firstly it produces what we call a channel and the instrument is said to be channeling ( or range trading ). The prices form a define
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
channel with two lines that can be drawn, one above, and one below. Now the important part for us is not to practice our drawing skills, but these lines actually help us considerably. Once one of these lines is penetrated by
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
prices, it becomes a line of support ( for prices going up ) and a line of resistance for prices going down.
Let’s imagine we have been watching a share for some months which has been trading within a channel. Suddenly we no
Let’s imagine we have been watching a share for some months which has been trading within a channel. Suddenly we no
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ice one day that it has broken above the line and prices are now moving up. The line that was originally resistance to higher prices has now become a line of support and we can trade with more confidence, knowing that if the
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
rices are going to go back down again they will have to penetrate this line of support or floor if you like. If you imagine a building with two floors, prices have moved from the ground floor through to the first floor, and w
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
at was the ceiling, has now become the floor. In other words it has become a SUPPORT to higher prices and will take effort to penetrate if prices fall back. It gives us a little more comfort ( but not too much ) in now buyin
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
into the move.
Using the house analogy again, we can see what happens at the bottom of the channel. Suppose we notice one day that prices have gone through the ground floor and into the basement, what was the floor has now
Using the house analogy again, we can see what happens at the bottom of the channel. Suppose we notice one day that prices have gone through the ground floor and into the basement, what was the floor has now
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ecome the ceiling and has become RESISTANCE to prices going back up to ground floor level.
Now, one final point on support and resistance. This occurs when prices ‘gap up’ or ‘gap down’. This occurs when the opening price th
Now, one final point on support and resistance. This occurs when prices ‘gap up’ or ‘gap down’. This occurs when the opening price th
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
following day, has opened at a different price from that which it closed at the night before. Now the reason I mention it in the context of support and resistance is simply this - if prices break out of a channel with a gap
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
p ( going up ) or a gap down ( going down ) this adds weight to the move and weight to your decision to trade. The reason the gap has formed is because the market makers have opened prices with a significant gap ( up or down
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
- they have done this for a reason. If it also coincides with a break out from a channel you can be reasonably sure that this confirms the move and therefore has more significance. Look out for them, they are worth the wait!
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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