Biotech Stocks

RPRX, a highly speculative biotech stock that I have mentioned on a previous occasion appears to be at an important juncture.  The juncture is the 6.50 price level which it needs to fully exceed (preferably with a full price bar above the level) to consider it a breakout.

It would also be good to see the 6.50 price level exceeded with 700,000 or more shares in volume.

A breakout is not a breakout until it actually is.  Strange as that may sound, it is true.  I have seen many a ‘potential’ breakout, only to see prices reverse by end of day and fail back under and into the previous range the stock was trading in.

If RPRX is not able to exceed the 6.50 level this upcoming week with conviction then one may have to assume it will remain range bound and head back to the bottom of the recent longer term trading range.

For now I do not believe that will happen.  My charts are saying that RPRX has a good shot at an upside breakout this week.

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A very clever comment poster here at BestOnlineTrades named ‘JR’ has brought to my attention the AFFX price chart and I decided to take a closer look.

The longer term monthly candlestick chart of AFFX looks attractive enough to me for me to call it another ‘big pattern trade’.  It appears BestOnlineTrades now has three choices for the next Big Pattern trade, HGSI, TLR and AFFX.  It is currently unknown to me at this time which is the best big pattern trade of the bunch.

The nice thing about Big Pattern Trades is that generally speaking there is more time and flexibility to go long these types of trades since they usually evolve over the weekly and monthly basis.

Anyway, AFFX appears to have broken out from a large falling monthly wedge pattern.  Monthly RSI looks constructive and seems ready for a bullish move above the 50 percentile line.

The April candlestick breakout in AFFX was not on huge volume or wide price spread.  This could be a short term concern, but the positive is that a full monthly price candlestick is trading above the falling wedge which should allow AFFX to start to trend higher from here.

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AMRN came up in one of my metastock scans a week or two ago and I failed to act on it.  It was actually a cup and handle scan and it also pulled up DBLE which I am currently long in.

It is unfortunate that I did not do a posting on AMRN as I look at the chart now it was maybe one of the best trading setups I have seen a long time.  I think part of the reason I did not do a posting on it was because it was a biotech stock with no revenue, 31 million in cash and had a 800 million market cap at the time.

Small and Mid cap Biotech stocks are probably famous for not having substantial earnings, but instead trading on potential and FDA approvals and milestones.  Perhaps they could be compared to exploration gold and other mining stocks.

Anyway a few days after AMRN came up in my scan I gave it a thumbs down despite the apparent massive positive cup and handle structure.

Sure enough a week or so later AMRN gapped up 100%. 

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