Sarepta Therapeutics, Inc. (SRPT​) shares have risen more than 10% since the beginning of the week after positive results from its Phase I/II study of golodirsen (SRP-4053). Since the Food and Drug Administration (FDA) already approved EXON 51 last year, these results increase the odds of an approval for EXON 53 as the company pursues other exon targets. Skipping an exon in the dystrophin pre-mRNA enables the synthesis of a shortened form of dystrophin protein.

The Phase I/II clinical trial was conducted on 53 boys with a form of Duchenne muscular dystrophy that responds to skipping exon 53. All 25 boys in the second part of the study experienced an increase in skipping exon 53 over baseline levels. Exon 53 is an exon skipping target that applies to about 8% of the target patient population, compared with about 13% for the already approved and commercially available exon 51 target. (See also: Sarepta's Most Famous Drugs and Medications.)

Technical chart showing the performance of Sarepta Therapeutics, Inc. (SRPT) stock

From a technical standpoint, the stock broke out from prior reaction highs and R2 resistance levels at $44.14 to fresh highs on Wednesday. The stock began consolidating on Thursday following the move, but prices remain above the R2 resistance-turned-support level. The relative strength index (RSI) appears lofty at 72.45, but the moving average convergence divergence (MACD) remains in a strong bullish uptrend.

Traders should watch for consolidation above trendline and R2 support levels at around $44.14 before an extended move higher on the upside. If the stock breaks below these support levels, traders could look for a rebound at R1 support levels at $42.21 or for the stock to move slightly lower than that to close the gap. The good news is that the selling pressure thus far on Thursday has been much smaller than the buying pressure on Wednesday. (For more, see: Sarepta Q2 Loss Narrows, Ups Exondys 51 Sales View.)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.