Sunday, January 12, 2014

Some Biotechs That Aren't Up 1000% In The Past Two Hours and Other Setups for Week Ahead

The big theme last week (which I missed because I was at work....arrgh) was biotechs.  ICPT went from $76 on Wednesday to almost $500 on Friday and the frenzy carried over to many other biotech names, whether they had news or not.   There are a lot of names that are untouchable now because they are so extended, but it is possible that the momentum continues early next week so I looked for some names in this sector that aren't extended beyond belief and could be tradeable.   Here are the names I found.

I was stopped out of many names on Thursday as for the first time this year the overall market seemed to mask worse action underneath the surface for individual names, at least for the names I was watching.  We saw an impressive bounceback Friday however and I added some new names on the long side.   A lot of the names I am watching remain very thin so I am hesitant to just throw them out here but here are some that might be worth watching if we see a breakout attempt on the overall indexes from the two week consolidations they are forming. 


Solars were a leading sector in 2013 and so far have continued their strength this year.   They have consolidated briefly for the past two or three sessions and although I would like to see further rest, some of these names might be in play again so for momentum traders.


3D printers were also big in 2013 and three of my favorite names from that sector are setting up again.  Both XONE and VJET had nice breakouts to start the year and have consolidated those for the past week or so rather nicely.  

 All Charts from TC2000, Courtesy of Worden Brothers, Inc.

One small note of caution: some of the numbers I keep track of on a daily basis in terms of breadth for the market are getting to very very high levels.   For instance, we are now on a streak of twenty straight days (from 12/12/13 to 1/10/13) of positive breadth in terms of 4% breakouts on heavier volume versus 4% breakdowns on heavier volume.   The longest streak we had in the past two years was 19 days (from 12/31/12 to 1/28/13).  We also have 38 stocks up more than 50% in the past month, which is the highest number I've seen since 2/6/12 when we had numbers more than 40.  

These may mean nothing more than we have a really strong market right now, but it's just something I am watching.   If you watched the year opening video that I put out on New Year's Day, you may remember me wondering if the market could rally further for the first two or three weeks of the year (surprising some who though tax selling would come into play and dragging in more retail investors) before finally putting in a long overdue correction.   No way of knowing that it is going to happen and I am staying long until I see concrete evidence that the market wants to correct, but just keep it in the back of your mind.   Good luck next week.

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