The Strong Grow Stronger
Duke Heberlein is
still on vacation. Michael Brooks wrote this article.
When the markets are down sharply, you can often find some clues as to which
stocks will rally once the markets begin to bounce. Learn to look for stocks
that are strong despite the market. These are the stocks that will usually gain
even more strength once the market improves. The opposite is also true. Weak
stocks in a strong market will usually get weaker when the market turns down.
This morning, there was lots of fear and the markets gapped down. The
Biotechs were the only positive sector. The pullbacks in bio were more of a
base near the highs and most of the stocks in this sector broke strongly higher
as the overall markets started to rally. Take a look at the TradersWire alert
and some of the individual chart examples below:
11:10:54
Applet Analysis Alert
The Biotech index ($BTK.X)
has moved up on strong volume. This group may provide for some nice intra-day
pullbacks to the long side. Keep an eye on the HOLDRS (BBH)
and individual stocks such as (AMGN),
(BGEN),
(CHIR)
and (IMNX).
Biotech
HOLDRs
(
BBH |
Quote |
Chart |
News |
PowerRating) based near the highs and moved even higher with the market.
Chiron
(
CHIR |
Quote |
Chart |
News |
PowerRating) based near the highs and moved higher with the market.
Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating) based near the highs and did not move higher (so far) with the market.
Why did BGEN not move up with the majority of the other Biotechs? I don’t
know. All I can do as a trader is put myself in high probability situations over
and over again. When a sector is strong in spite of the market, it will usually get
even stronger if the market turns around (provided it is not a contrarian’s
sector such as gold). Learn to look at the bigger picture and then narrow your
focus down to a few select stocks. This will put you in the right stocks at the
right time, more often than not.
Have a great weekend!