The Drug Sector is Starting to Turn Bullish
After yesterday’s strong selloff, we have started to find some
fresh buying opportunities from today’s
PowerRatings Heat Map. Today’s article will focus on the Drug sector,
which is showing price action that has historically led to higher prices over
the short-term. Â
Stocks with high PowerRatings (8 or higher) have been
historically proven to outperform the S&P 500 over the next 5 sessions by up to
a 14.7 to 1 margin. Low PowerRatings have been shown to underperform the
S&P 500 over the next 5 days. These stocks should be put on a list of stocks
to avoid. More aggressive traders may want to keep an eye on these stocks
for a potential short entry.
One of the great features of
Heat
Maps is that we can zoom in
on a particular sector for a deeper look. Here we have a close up of the
Drug sector:
Here are a few daily charts of the some of the stocks
listed above:
Xenoport Inc.
(
XNPT |
Quote |
Chart |
News |
PowerRating)
XNPT has pulled back from its all-time highs, which were made on
4/26/07 and has reached a PowerRating of 9. Recent selling pressure may be
coming to an end as it has sold off and consolidated for the past 8 sessions.
Somaxon Pharmaceuticals
(
SOMX |
Quote |
Chart |
News |
PowerRating)
Specialty pharma company Somaxon
(
SOMX |
Quote |
Chart |
News |
PowerRating) shows similar
characteristics to XNPT above. SOMX has
a high PowerRating of 9 and is pulling back from recent highs. Keep an eye
on this stock to make a move back up in the direction of the trend.
Regeneron Pharmaceuticals
(
REGN |
Quote |
Chart |
News |
PowerRating)
Regeneron
(
REGN |
Quote |
Chart |
News |
PowerRating) has been pulling back in the past few sessions and currently
has a PowerRating of 9. Keep this on your watchlist for a potential entry.
If you would like to attend a free class which covers this
research and strategy further, please
click here
for the calendar of the upcoming online classes. Topics
covered include our latest research on
entries and exits, and
how to use PowerRatings with our new
Preferred Stock List.
For a free PowerRatings trial,
click here. If
you have any questions about PowerRatings or the new Stock Indicators please
feel free to email us or call 213-955-5858 ext 1.
Darren Wong
Associate Editor
Reminder: We are in no way recommending the purchase or short sale of these
stocks. This article is intended for education purposes only. Trading should be based on your own understanding of market conditions,
price patterns and risk; our information is designed to contribute to your
understanding.