Biotech Thursday

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I have given in to the pressure. 🙂  After our normal market review, I will discuss some of the biotech stocks that are a bit higher risk, but have been seeing tremendous rewards (gains) lately.

 

SPX –  The idea of a trailing stop is working well, but we are on day 31, so we are now entering the time for the general markets to begin to seek out a dcl.  Lately dips have been sideways and downward as seen on this chart. Since that was an ICL that we just put in place,  and this is a R.Translated daily cycle, holding on to anything that is not leveraged may be fine during the dip into the first daily cycle. Some people just ride out the dips.

 

 

RUT –  The RUT ( or IWM) has been running straight up, similar to last November, when it tagged the 200sma and took off higher. Please read the chart.

UUP – I’m using the UUP for the volume, but the UUP & the USD have put in a swing high, and the timing is right for a drop into a dcl.  A shake out at the 50sma wouldn’t surprise me, but it could just go sideways & down to the 50sma.

WTIC –  Oil has a day 19 peak on the 2nd daily cycle.  It landed on the 200sma, so it may bounce from here and seek out a dcl later.

 

XLE – The XLE is overbought, but it doesn’t seem to want to give up the gains. It MIGHT just consolidate sideways along the 200sma as a giant flag.  If it eventually breaks down, I would assume we have a false break out and a drop to the 50sma takes place.

 

GOLD – Day 39 dcl and Day 1 of a new daily cycle?   See the chart below. Some were not happy that Gold ran higher and gave up the gains, but the lows were not violated Wednesday and…

 

GOLD – I see that a lot near the lows. July lows stalled out of the gate too.

GDX – GDX does have a swing low now and is on day 2,  it was stopped by the 50sma so far.  Since we are thinking that we are going to get a Left Translated Daily cycle, we expect GDX to peak on an average of 8-12 days. Day 8 is next Thursday, so let’s watch how this plays out.  It can be more or less, but that is a rough average.  Our next task is getting above the 50sma for both GDXJ & GDX.

CDE–  I was asked about my buy call 2 days ago for CDE.  It started running and gave up some gains Wednesday too, but again, 1 day at this point doesn’t mean that much. We have seen this before too.

 

 

BIOTECH

 

XBI–  XBI  hit 88.48 , which means that it is reaching my initial 90 target from last summer, but it can extend beyond that over time too.

 

I almost want everyone to re-read the final section of yesterdays report pertaining to the type of Biotech rocket ships that I am about to discuss. I offered a few ideas there, but also warned of the risk in this area.   These are trades that I have been making, but didn’t want to recommend too often, since it can be distracting, and some find it to be a ‘get rich quick’ idea ( which it is not).  Well, I got emails asking me to offer the trades, with a BUYER BEWARE DISCLAIMER, so I will do that today.  I wrote this at the end of yesterdays report…

 

SIDENOTE:   This type of trading is really not for everyone.   Yes,  I have other Biotech stocks  on my list, but I really do not want to distract people here from the safer areas to make money. I have seen good friends of mine get ‘bogged down’ trying to just hit the home run, taking their money and spreading it out into 5 or 10 of these bases, and miss out on normal healthy trading gains over time.  It can be distracting.   A baseball team that hits just 3 home runs in a game may not beat a team that hits a steady number of singles and doubles in a row each inning.  Trading and adding gains with already bullish stocks trending higher, like IPI, TGB, HBM, CLF, X, GRPN, TSEM, MU, etc over time will help the account to grow in a more relaxing manner.    Steel stocks are steadily climbing, Miners may be ready for another  run higher, and there are other ‘set ups’ that offer steady gains over time.  Readers here are better served investing in stocks that are trending higher gradually.

That said,  along with MBOT,   GNMX has an interesting base set up, so I will be watching it.  See a 6 month chart, and then 3 month chart.

 

SO let’s look at this area again.  For those inclined to try this type of trade, ENTER AT YOUR OWN RISK.  Understand that these bases can continue to base out for many more weeks or even month- there is no guarantee that each company will break out higher at this time.

 

EXAMPLE:

CTRV – CTRV was on my watch-list last week and it popped slightly Tuesday,  then Wednesday it ran up about 30%.   I missed this one because the base was sloping downhill.  I thought that that might be a bad sign, so I didn’t take the trade after Tuesdays pop, but apparently that didn’t matter yesterday.  Live & learn. 🙂

CRMD –  This one I entered in August, thinking that it was ready to go, and it continued to base out by dropping back to the 50sma.  I put it in a report Sept 29 with this chart, saying that this set up is now probably ready again.

CRMD – And off it went. It pulled back Wednesday, so it could do a bull flag or back test as shown.  That would be another buying opportunity in the future.

GNMX – At the end of yesterdays report, I said that GNMX was on my list. It gapped open Wednesday and sold back off.  I took a position when the gap filled and I still think that this has the potential to continue higher.  Why?…

 

GNMX –  Because this is what I was looking at when I first mentioned it, and yesterdays POP just validated my thinking.  This is a massive triangle or wedge, and it broke out. I think sooner or later it will make a run.

 

I pointed out INFI  on Sept 29, when it popped 16.67%.  It looks ready to go.

INFI – It dropped Tuesday, and reversed higher again Wednesday.  This can break and run to the 200sma quickly.

MBOT –  I had MBOT in yesterdays report, but this in the report for September 15 as it began breaking above the 50sma.  You can see how long it can take for  one of these bases to break out & go.  This was weeks ago. Please read the chart.

MBOT – MBOT popped above the 50sma, but not above the blue dotted trend line.  It then back tested that area & reversed higher today. Even though it sold off a bit into the close, I have seen set ups like this find the follow through very shortly after (See that first CRMD chart above) so we will see how this plays out.  I like this set up, I added today.

 

FINALLY FOR NOW, I haven’t mentioned this one yet

 

APHB –  I love this base, but it may not be quite ready yet.  This is one that has been on my watch list for a while, it has several characteristics that I look for, but it also needs to break higher with conviction to show that it is the right ‘time’.  Without that, it could continue along this bottom in the same way that it has for the past few months.

 

All things remain pretty much the same with the various market sectors.

General Markets are running higher.

Oil is dipping down, but energy stocks have been holding gains to a degree.

Gold should be putting in a dcl, Miners seem to have one.

When it comes to the Biotech sector, I am showing a very specific type of set up,  the kind that can lead to explosive gains, but also have their own risks to consider.  There are other Biotech stocks that are set up nicely too, and they have normal bullish chart patterns.   Look at a chart of  ZIOP – looks like a buy right here, GALT, SSRA  ( I mentioned that in the comments yesterday after a reader here Chuck pointed it out to me in an email, but that one took off later in the day), HALO, CEMP, VBLT, and more.  The sector has been pretty hot and it seems that smart money has been flowing in.

Enjoy your Thursday trading!

 

~ALEX

 

Lesson:  You never know

 

I mentioned that I was adding to MBOT yesterday. It ran higher and then it sold off into the end of the day, back down to my ‘add’ point near $1.30.  Did I sell?  No, I added a bit more, but why? Well, for one thing these are exploding out of their bases and I am willing to wait for this to make the run higher, but also…

I have seen a number of them experience ‘profit taking’ at the end of the day, and then those that sold it miss the real move, so I decided to be patient and allow it to do its thing.   CRMD sold off the day before jumping over 30%.

ECYT –  ECYT sold off a bit into the close last Friday Sept 29…

ECYT MONDAY – Gapped away and left them behind, up 157%

ECYT TUESDAY –  And how do you think those that sold into Fridays close felt on Tuesday as it went from $1.40 to $6.55 in 2 days?  I’ll take my chances and ride this base of MBOT for a little while longer.

 

 

143 replies
  1. Ralph Wiederzane
    Ralph Wiederzane says:

    I haven´t been wild about miners for the last month, but must admit the weekly chart does look good, even ¨normal¨. I´m on the MBOT train and will buy a ticket on a couple of the other bios mentioned since that is where the money is flowing, one ECYT is all we need. I will keep playing the bios long while I wait for GDX to flip to BUY on monthly again, we are close but not yet.

    Interestingly the 30 yr treasury has again flipped to sell after 8 months on buy signal. I will short via the futures, this is a longer term trade lasting 6 to 10 months, sometimes even longer if the trend continues.

  2. Bill
    Bill says:

    ALex, what do you think of ONCE? Spark Technologies is getting ready to get approval for its 1st gene therapy for blindness. Then hemophilia after that. It may be a buy out candidate.

  3. Hawaiifive0
    Hawaiifive0 says:

    Thanks Alex. I am thinking that these bios could be played pretty much like the marijuana stocks. Just buy and forget and check on it in a couple of years. The question would be how heavily involved does one want to get. I’m thinking no more than 5-10% of the entire account for both. Does that make sense to you?

    • Ralph Wiederzane
      Ralph Wiederzane says:

      For the long term idea, I was just searching for an etf so I wouldn´t have to pay attention to all the news on each individual names, and found this BBC etf, looks like it moves more than the XBI, BBH big cap etfs. I have to look into it more, just sharing an option.

      • Hawaiifive0
        Hawaiifive0 says:

        Yeah, but my thinking was more along the lines of finding an individual stock that could become worth 50 to 100 times what it is now. And to throw a couple thousand bucks at it. Like what I think Alex, myself and some others are doing with the Marijuana stocks..

        • Ralph Wiederzane
          Ralph Wiederzane says:

          Got ya, I thought you were talking up to 10% of accounts in these risky names. I am not typically a big fan of etfs, the only ones I have traded are SILJ (still own some for long term), and OIH the other day, and OIH only bc I was too lazy to pick on individual drillers!

    • chartfreak1
      chartfreak1 says:

      It does. If there is one that is getting funding or has passed some tests or trials and has a good long term outlook, buying $5000 worth from a 100,000 account ( for example) wouldn’t hurt , even if it ran into trouble and got cut in 1/2.

      If it doubles , doing what ECYT or MTBC , etc have done, it adds some good pocket change, and one could even take the original $5000 out and let the other $5000 ride.

  8. Tammie
    Tammie says:

    Been watching CYTX….haven’t gotten it because seems the company is in lots of trouble financially…but it’s going up today….

  9. Ralph Wiederzane
    Ralph Wiederzane says:

    I will add to MBOT later this morning if it can come down a little more or holds steady while the Nasdaq pulls in (if it pulls in, I should say).

  11. Ralph Wiederzane
    Ralph Wiederzane says:

    The uranium companies must be getting desperate. Yesterday afternoon I received an email from UEC´s shareholder relations asking for my phone number so we can talk? Crazy, being I am not a shareholder and barely interested.

  19. Ralph Wiederzane
    Ralph Wiederzane says:

    C´mon MBOT, I´ve been in you for almost 18 hrs and you haven´t made me rich yet!! She´s just laying there gathering steam for the next run, like a tiger crouched and ready to take down it´s next meal.

  20. Cal Staggers
    Cal Staggers says:

    Hi Alex – Thanks for another great & informative report!

    You mention that XBI may be getting close to your target – would it be advisable to exit or reduce LABU?
    It seems to be hitting the top of a measured 5 waves up on a 2-hour chart
    (Uh-oh, I’m using EW – now we’re in trouble)

    • chartfreak1
      chartfreak1 says:

      Trailing stop maybe? In case it gets a bit more in the run. Although a gap down would be a bit of a bummer.

      My target was 90 before the inverse H&S. The Inverse H&S has a higher target, but it looks like it wont make it that high ( 100 for Labu).

    • Cason
      Cason says:

      Cal, I’ve got a limit sell order in for $92.00. Maybe it continues to run away but I got a decent move out of it and will be happy to take the cash. Trailing stops is hard with the 3x just b/c of the volatility sometimes but might work nicely for you though.

  23. RonB
    RonB says:

    Sold IAG for 5% gain as it broke through the 50. With a possible one week until roll over in the gold market I’m starting to protect.

  24. RonB
    RonB says:

    Started a position in APHB @ 103.9. I’ve read up on this one a few months ago. With the problem of antibiotic resistance they are going back to an age old cure of “Bacteriophage”. Way cool.

  26. Tammie
    Tammie says:

    Wow, MNKD blew throught $5…I knew it was going to get there but didn’t think it would be in a matter of 10 minutes….man!

  29. Steve Tytler
    Steve Tytler says:

    Alex, I have question about how you would use Trailing Stops on a position.

    I’m back in my old friend TQQQ, it has finally broken out above the July and September highs. My charts for TQQQ are very bullish, but it’s also at an ATH so I’m going to try using a trailing stop this time to keep riding it up. I normally set hard stops based on prices that violate various MA’s such as the 5 day EMA. When you set a trailing stop, do you have a rule of thumb for how you set it? Do you set it at a certain % below the current price or do you go by a certain dollar price below the current price?

    • chartfreak1
      chartfreak1 says:

      Hi Steve – I’ve tried to explain it before, but it raises more questions.

      I use mental stops most of the time.
      A trailing stop is good fro price that is rising and gets a bit over-extended or timing-wise the daily cycle start to become due.
      That stop follows price to lock in gains on an anticipated future dip.

      No rule of thumb for me, because I use them under varying circumstances-

      When a stock starts to run away, it gets very extended over moving averages, so that may not work.
      I just try to lock in what I do not want to give back, but not too tight so that intraday swings would cause me to lose position.

      Hope that helps, I’m in a bit of a hurry right now, just checking in at midday

      • Steve Tytler
        Steve Tytler says:

        OK thanks. I thought maybe “The Master” had some secret formula for setting trailing stops. I’ll figure it out on my own. Like you said it’s a tricky trying to ride the bull without giving up gains by holding too long.

          • Steve Tytler
            Steve Tytler says:

            I bot TQQQ yesterday and wanted to add more on a dip today, but it didn’t dip so I bot more anyway. IMO this rocket is just starting to take off. October and November are seasonally strong months for TQQQ and QQQ has been lagging the S&P and Dow for a couple months, so it’s catch up time. I know “everyone” is predicting a stock market crash and this is risky, but I think stocks are headed for a blow off top going parabolic over the next year or so and I’m going to hang onto the rocket as long as I can. Now miners, that’s another story. Once again I bailed out of my NUGT/JNUG today. The USD is in a strong UP trend on my charts and there is just no fighting it IMO.

  34. Peter
    Peter says:

    Seems like not enough energy to move gold. May need to tag mid-low 1260’s like Alex suggested earlier this week.

  35. frank yong
    frank yong says:

    Hi c.f.

    The nasdaq appears to breakout today you advised using trailing stops because of dcl ahead. How can you tell between the start if parabolic run vs a fakeout that drops into a dcl or icl?

    • chartfreak1
      chartfreak1 says:

      Hi Frank,

      Actually , the reason for a ‘trailing stop’ is to provide protection in either case.

      1. It helps you to hold your gains and avoid losses if the bigger drop into a dcl takes place, you get stopped out near highs, but

      2. If it becomes one of those run-away moves that just goes up day after day after day – you wont miss the move. Instead of selling because it is overbought or due for a dcl, you follow it higher.

      Look at this chart of the IWM ( Or RUT). Instead of selling because it looked extended or overbought a week or 2 ago, you use a stop that follows it higher, and a trailing stop keeps you invested as it moves higher day after day.

      I hope that explains it a bit. The parabolic type moves become evident over time, in real time it just looks like a bullish move higher, but it just keeps going.

      https://uploads.disquscdn.com/images/2d6e6337533147684c08bc802e593c5709cfc3caa94d71c0cbbcce14664090d9.jpg

    • BayTrader
      BayTrader says:

      figured Id ask over here and not clutter todays board… I wanted to ask what you were currently in? I see when you post we are in the same things from time to time…

  38. Tammie
    Tammie says:

    agghhh…..was just looking at aphb Alex mentioned in report and got side tracked….just now looked back it….boom, up it went while I had my head turned

    • Ralph Wiederzane
      Ralph Wiederzane says:

      Thanks for pointing that out, and I hate to say it but the silver miner etf SIL is starting to look like a downtrend may resume, if the moving averages are foretelling.

    • Cason
      Cason says:

      I sure don’t feel very good about it. I mean we got really oversold, we gotta have some kinda bounce eventually. I mean seriously? So at this point I keep thinking that there has to be a better place coming to sell. But I’m looking to sell any rally not buy more ahead of it.

  48. Ralph Wiederzane
    Ralph Wiederzane says:

    It feels better to at least be involved in groups that are in play vs. the miners which are not getting killed, but seem rather apathetic. They will have their turn again, but I´m happy to be looking at that have interest. Still have the miners that haven´t stopped me out, but no great hopes there in the near term.

    • Cason
      Cason says:

      No great hopes here either. Really darn disappointed. And with my work schedule I’ve been way too busy to put the research and charting time into all of these bios. And they move fast so if I’m not in front of the screen when they go south…

      • Ralph Wiederzane
        Ralph Wiederzane says:

        CF does it for us, I learned I can´t chart any better than him, so I use his charts and instead focus on my risk tolerance and controlling total risk. That´s a big enough job, but I hear you and agree the last several months (for me) have been going nowhere. Then there are times when I make more than seems fair for what we do, week after week, so I suppose it all evens out. I plan to stick around for another of those runs, even if I am late to the bio party, which it´s too soon to tell. Size is everything in trading, and I can afford more losers before I get a strong trend early again. Good luck.

        • Cason
          Cason says:

          Yeah, don’t get me wrong, my disappointment with Gold/miners does not translate to disappointed with CF. Yeah, we were kinda off on this one, but he bats way the heck over .500 – just wish I could. I agree, I can’t do it this well either which is why I stay a member. 🙂

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