Wednesday, July 10, 2013

Many Biotech Names of Interest Here

In the past, I have generally stayed away from biotechs for swing trades as the fear of waking up to disappointing drug news and a 90% one-day drop in my stock was stronger than my desire to make gains in these names.   The group however has been a leading sector for a while now and tonight I noticed several biotech names in my scans, all with similar patterns.  Perhaps this is worth watching going forward.

The first group are more flat, shorter-term consolidation patterns that might work well on potential breakouts.  VNDA however is already at a breakout level and chasing a gap could be tough.

 BIIB
VNDA
HALO

The next group are names that have been consolidating sideways to slightly downward and have some downtrend lines to deal with as resistance.  If they clear these lines, new moves could begin in earnest. 

MNKD
ACAD
 KERX
REGN
 VRTX
Charts from TC2000, Courtesy of Worden Brothers, Inc.

The real problem however as I see it at this particular point is that the Fed spoke tonight and boosted futures a great deal in the after-hours session.  If those gains hold into the open and we get a big gap up, it might set up a perfect "sell the news" scenario considering how this most recent rally has come straight up off the lows with almost no rest.  Of course, I know I am not the only one thinking about this scenario so perhaps it is too obvious and the market will gap and just keep running tomorrow.  We shall see.  


A few other names of interest here on the long side are shown below.   Good luck - the gap (if it holds) is going to make things quite interesting. 

Chart from TC2000, Courtesy of Worden Brothers, Inc.

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