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Archive for the ‘BioTech’ Category

Retail Sales Help Lift Futures

Friday, March 12th, 2010

9:05am (EST)

The market struggled for much of Thursday after a weaker open and briefly made it into positive territory a few times as the bears tried to keep their fingers in the dike. However, by the final hour of trading, the bulls flooded the market with buy orders and the bears ran for the hills.

The Dow managed to pull out a 44 point gain to close at 10,611, its highest level since January 20th.  The 2010 high for the index is 10,767 and if we don’t get there today, it sure looks like we will next week.

We have also been talking about the 1,150 level for the S&P 500 and that is exactly where the index closed with its 4 point gain.  This level was hit twice at the beginning of the year and was a good sign that the bulls are serious on taking the market higher.

The real deal has been the Nasdaq which set a fresh 52-week high by adding 10 points to close at 2,368.  We recently raised our target for the Nasdaq to 2,400 but we may have to raise that again if the Dow and S&P can break through 10,800 and 1,175.  If so, then we have mentioned that the Dow could run to 11,000 while the S&P could move towards 1,200 if those two indexes can keep up with Tech.

On Tuesday, we told you about Amylin Pharmaceuticals’ (AMLN, $21.19, up $0.29) big day today and it looks like they could be popping champagne at headquarters.  The FDA could approve its diabetes drug Byetta, for which it is partnered with Eli Lilly (LLY, $35.82, up $0.48), to produce. 

amln

This will be great news for Amylin if the drug is approved and will be a blockbuster as it should easily do $1 billion in sales, quickly. Byetta would be the first once-weekly treatment in the war against type 2 diabetes.

As you can imagine, there was a tremendous amount of action in the stock as well as the option pits.  Over 12.6 million shares traded hands (3X normal volume) but there were plenty of big bets being placed on both sides of the ball. 

The March 25 calls (AQM100320C00025000, $0.90, flat) were the flavor of choice for bullish traders as over 22,000 contracts traded hands.  As far as the skeptics, they were hoarding the March 15 puts (AQM100320P00015000, $0.70, up $0.20) as volume came in at 25,000 contracts.

Most traders probably played the stock one way, betting for or against approval, but the two aforementioned options could have been used as a strangle option trade.  We mention these types of trades from time-to-time but we stayed on the sidelines for this one.  It is somewhat of a “chicken trade” or a “safety” play and can be used if you think a HUGE move is possible, either way. 

We also mentioned we were watching Alkermes (ALKS, $12.64, up $0.08) which is a company that enables the slow delivery of the drug.  No word yet but this breaking news will be hitting the market sometime today.

alks031210

Retail sales came in better-than-expected and the futures, which were already up, got stronger.  As we head to press, the Dow futures are up 36 points to 10,583 while the S&P futures are up 5 to 1,150.  The Nasdaq 100 futures are also up 5 points and stand at 1,927.

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Market Tight As Traders Look For Clues

Monday, February 22nd, 2010

1:10pm (EST)

The market opened slightly higher but was unable to hold its gains as the bulls and bears position themselves for this week’s battle.  We have been in a tight trading range for much of the day but the sentiment is a little bearish after President Obama proposed a new Medicare tax on unearned income and $10 billion in additional fees on drug companies.

The bulls may be in a wait-and-see mood which could lead to some lackluster trading as they wait for more earnings reports this week.

Speaking of earnings, Campbell Soup (CPB, $33.33, down $0.60) reported numbers of $259 million, or $0.74 a share, versus $233 million, or $0.64 a share, in the year-earlier quarter.  Sales rose 1% to $2.15 billion.  Wall Street had forecast Campbell to earn $0.73 a share on sales of $2.2 billion.  Although earnings rose 11% as the company’s margins improved, it continued to see weakness in U.S. soup sales and volume fell 2%.

We mentioned Dendreon (DNDN, $32.89, up $0.53) this morning after the stock was up in pre-market trading.  JPMorgan (JPM, $40.71, up $0.68) came out with an ”Overweight” rating and a $46 price target on our favorite Drug stock.  The call is based upon a belief that Provenge will be approved for advanced prostate cancer.

Many of you know we have been following this story for over two years and Dendreon was by far our biggest trade return last year as our subscribers rode the stock from $4 to the mid $20’s.

There are also higher “unofficial” price targets for Dendreon but the drug must get approval first before we say it’s headed past $50.  However, we think shares can hit over $100 in the next two years if Provenge is approved but it will depend on how well the company handles the transition from small town Billy to big town Bobby as sales are expected to reach over $1 billion.

We also mentioned Dendreon on our Watch List last Wednesday in our Members Area and told our subscribers about the “triple-top” resistance that was at $30-$31 and to watch for a breakthrough.  We also listed an option trade that is now up 50%.  We were waiting for the February options to expire before making this an “official” recommendation but the train left us.

We are still looking at other trades for Dendreon but we don’t want to chase with the options we have already talked about.  There will be another opportunity for us to buy some options and that may come this week or next month as we do feel an explosive move higher is forthcoming.

As we head to press, the Dow is down 6 points to 10,396.  We have a lot of updates to cover in our Members Area so let’s get to it… 

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Tuesday Tidbits…Dendreon News Building

Tuesday, September 22nd, 2009

12:40pm (EST)

Dendreon (DNDN, $29.83, up $0.37) popped over $30 again this morning after an analyst initiated coverage of the biotech company with an “Outperform” rating and a $40 price target…

It looks like we left some on the table with First Solar (FSLR, $160.63, up $3.38).  The October 165 calls (HJQJM, $7.10, up $1.40) were profiled at $2.00 on 9/10 in the Members Area and we were out at $3.20 on half and $1.95 on the other half by 9/14.  We cleared 30% but those of you who went for gold despite the volatility are up a whopping 250%…

Fairchild Semiconductor (FCS, $11.39, up $0.34) has made a huge run since we last visited the stock in July.  At the time, shares were going for $8-and-change I was wrong on the August 10 calls at the time.  Sometime we are off by thismuch when it comes to finding great option trades and this appears to be the case with this one.

AutoZone (AZO, $152.64, down $0.91) is slightly lower today.  The company will report earnings on Wednesday and this is always a fun one to watch after they report.

There are no new trade recommendations today.  We are holding what we got…

Rick@MomentumOptionsTrading.com

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BioTech Stays Hot

Tuesday, September 8th, 2009

12:45pm (EST)

The market is off to a good start as the bulls came out in a buying mood.  The Dow is up 35 points to 9,476 but is off its highest levels of the day. 

There are a few BioTech stocks that are trading higher today.

Facet Biotech (FACT, $16.12, up $0.74) is up 5% after it rejected Biogen Idec’s (BIIB, $51.32, up $0.31) offering of $14.50 a share.  Facet said the $370 million buyout offer places no value on the operating and other assets of the company.  Shares nearly doubled on Friday, rising from $8.82 to a high of $15.92.  The stock has traded as low as $6 and as high as $50 over the past year.

Biogen went “hostile” with the offer on Friday after an initial offer of $15 per share back in August.  The two companies have jointly worked together on drugs for multiple sclerosis and a treatment for tumors.

Opexa Therapeutics (OPXA, $3.82, up $2.29) is soaring, up 150% on news that its drug, Tovaxin, provided better-than-expected results in a mid-stage study of 150 patients with multiple sclerosis.  There are no options on this stock but the shares opened at $2.33 this morning…

I was thisclose to profiling a Jazz Pharmaceuticals (JAZZ, $10.39, up $1.12) trade this morning after noticing the action in the stock from Friday.  There was no real news for the jump from $7 to $9 but volume was heavy as 12 million shares traded.  The September 10 calls (JWQIB, $1.25, up $0.40) are up over 50% today after opening at 60 cents.  These options expire in 10 days.  This trade is probably too late to get in but the action from Friday was telling me something.

Campbell Soup (CPB, $32.33, up $1.14) has broken through resistance of $31.75 and I profiled a possible trade in the Members Area this morning that has nearly doubled from this morning.  If you got in right after the open set stops to protect your profits or close the trade by the end of the day.  Anytime you make 75%-100% in a few hours, take Steve Miller’s advice…go on take the money and run.  If you owned the stock and sold the call options for the premium then you also did well.

Rick@MomentumOptionsTrading.com

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Trader Comments:

    LAWRENCE O.
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    NOEL
    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

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    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

    JOHN
    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

    CHARLES M.
    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

    BRYAN C.
    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

    JOHN H.
    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

    JEFFREY
    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

    ED
    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

    GREG
    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

    KEN
    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

    GARETT
    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”