Biopharma Play

When the market’s in uncertain waters and traders fear a selloff, the flight to safety would be healthcare, pharma and utilities. Here’s a low risk biopharma play in MDVN. You will notice throughout most of my trades I focus on low capital risk. If I lose, I want to lose now and keep the loss small. Occassionally I’ll post a trade with a wide stop but that’s generally for your larger BETA names like GOOG or BIDU and on short positions. 

Now About That Falling Knife

My post below talks about not anticipating a move in a stock. Let the move develop – then jump.

Here’s a great example.  Coal prices begin to increase in the Summer months so this trade (ANR) is a nice setup.  It’s forming a pennant (or flag) and should break to the upside at some point. Can’t tell you when – might be this week or next month. So what do you do?  Do you jump in now and add on dips waiting?  Or do you set an alert above the breakout point?  There is no right or wrong answer.  It’s a matter of personal preference but if you get in now, just realize that your capital could be tied up in the stock while you wait for a break and you also risk overall market movements due to news, earnings, etc. so be certain to keep a stop in place…..just in case