KPTI - A Breakdown is on the Horizon for Karyopharm Therapeutics

A key support level has emerged in the chart of Karyopharm Therapeutics Inc (KPTI).  If the stock moves under this level, a breakdown could occur.

KPTI is a pharmaceutical company. The company focused on the discovery, development, and commercialization of medicines with the goal of improving the lives of patients with cancer.

While KPTI’s earnings were essentially in line with the previous year’s figure, revenues increased to $21.3 million from $13.2 million. Its Xpovio sales were driven by new prescriber accounts and an increase in average refill rate. The second line multiple myeloma indication for Xpovio should be added later this year.

The company had $263 million in cash as of the end of the latest quarter, compared with only $128 million in long-term debt. Though KPTI is not profitable yet, with a negative net margin.

While earnings are still underwater, revenue has surged an average of 224.9% over the past five years and is expected to rise 74.9% this year. The stock appears undervalued to its industry with a Price to Sales ratio of 11.6.

The stock has shown mixed performance figures over the past year, along with mixed component grades and an overall rating of Neutral in our POWR Ratings system.

Take a look at the 1-year chart of KPTI below with added notations:

  Chart of KPTI provided by TradingView

KPTI has formed a major level of support in the $14 area (green) over the past year. The stock looks like it may be falling back down to that $14 level again, and if so, another bounce may follow. However, if the support were to break, lower prices would likely follow for KPTI.

If the stock were to break below the $14 support level, a short position could be entered with the expectation of a breakdown.

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KPTI shares were trading at $15.06 per share on Monday morning, down $0.17 (-1.12%). Year-to-date, KPTI has declined -2.71%, versus a -0.47% rise in the benchmark S&P 500 index during the same period.

About the Author: Christian Tharp, CMT

Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.

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