Two Great Stocks Traders Should Put on Their Radar Screen In an article in this column in early October (see it here), I discussed biotechnology stocks as a great sector for stock market speculators. Even with a lackluster stock market, biotechnology stocks can punch up the returns on good news. They continue to have the liquidity, news flow, institutional participation, and major price action that traders need in order to make money. Biotechnology stocks will be one of the best stock market sectors for risk-capital traders going in 2013. Earlier, I wrote about ACADIA Pharmaceuticals Inc. (NASDAQ/ACAD), which recently completed a Phase III trial for its Parkinson’s treatment. All the company did was announce that it had completed the trial, and the company’s share price almost doubled. Now more news is coming out regarding the effectiveness of the company’s Parkinson treatment, and the stock is soaring. As with most stocks, you never want to fall in love with a biotechnology stock. Extreme volatility is a given in this stock market group. But, for a good stock market trader, this volatility is exactly what’s required; strong, liquid price action is everything. ACADIA’s stock chart is below:
Chart courtesy of www.StockCharts.com
Threshold Pharmaceuticals Inc. (NASDAQ/THLD) is another biotechnology stock that’s worth keeping an eye on. This company has had a tremendous year on the stock market. In February, the position was trading at $1.29 a share; then, it soared to $8.80 by the end of March. After consolidating all spring around the $6.50-pershare level, the position again moved to the $9.00-per-share level by September. It recently fell back to $4.00 per share, and now seems to be moving higher again. The company’s recent stock chart is below:
Chart courtesy of www.StockCharts.com
There are blue chip, dividend-paying biotechnology stocks, but there are a lot more start-ups and micro-caps in the stock market. As a group, biotechnology stocks have been one of the strongest stock market sectors over the last few years, and the NASDAQ Biotechnology Index has been a robust performer. Right now, trading action in the broader stock market is generally poor. Expectations for revenues and earnings are flat, and trading volume isn’t very robust. There are actually very few areas for stock market traders to find liquidity, news flow, and institutional participation that compare to biotechnology stocks. Trading action in this group should remain strong going into 2013.
Source: Penny Stock Detectives