The market is stalling at all-time highs… and traders are still trying to piece together the puzzle…
However, I’m not one of those traders.
I’m focused on trading biotech stocks — they offer explosive opportunities and move at their own rhythm— regardless if the market is grinding higher or set to crash.
You see, biotech stocks are catalyst and pattern-driven.
Let me show you… heard of NextCure Inc. (NXTC)?
If you haven’t… the stock exploded by 248.92% the other day after it announced some positive data for its cancer drug.
Heck, on any given day… you’ll see multiple biotechs on the leaderboard. Just take a look at some of yesterday’s top-performing biotech stocks.
It’s not uncommon to see these stocks move 20%+ on any given day… heck, sometimes they can move 50%+.
You might think biotechs are hard to trade…
But the thing is, there is a simple method to trade biotech stocks… all you really need to do is look at a calendar and spot a bullish pattern… and you can consistently rake in profits like these…
So how do I trade biotechs, and what are the 2 stocks I’m watching right now?
Two Biotech Stocks to Keep an Eye On
When I look for explosive opportunities in the biotech industry, the first thing I do is look at the catalyst calendar. BioPharmCatalyst offers an extensive list of biotech and pharmaceutical companies set to release important data points.
I find a handful of stocks with an interesting catalyst event… and then I look for a bullish setup.
I might look for a bull flag pattern, gap fill, bounce play, or a trendline break. The possibilities are really endless.
But what happens if you don’t understand how these catalysts work?
There’s no problem there… you can hop on over to Finviz, and filter for biotech stocks to trade… then look at BioPharmCatalyst to see if there’s an upcoming event.
For example, here’s a simple filter you could use to find these stocks.
One biotech stock on my radar right now is Del Mar Pharmaceuticals (DMPI).
Basically, I quickly glanced over the charts and noticed a bullish pattern in DMPI.
The stock had a bull flag formation… and it’s been trending higher for the last few weeks.
Not only that, but there is a gap above (between the blue horizontal and green horizontal lines). That means there is massive upside potential in the stock.
Once I found that setup, I went on over the BioPharmCatalyst and just typed in the ticker.
The company is set to report some key Phase 2 data for one of its products (you don’t need to know what the drug product really is).
The whole idea here is that the fact DMPI has a bullish setup and an upcoming catalyst event. Typically, when we see that formation… the stock could run up into the event.
That’s what I call the catalyst runup.
I’ve got a plan in place for DMPI, and I’ll be keeping a close eye on it. Once it reaches my buy zone, I’ll alert my clients about my moves and update them on my target or stop (if they change).
The second stock I’ve got on my radar is Durect Corp. (DRRX).
I found this trade the exact same way I found DMPI.
On the daily chart, DRRX has been relentless. This stock has more than doubled since July, and it’s got a really nice bull pennant/bull flag forming.
Chances are when we see this pattern, the stock explodes higher.
The company is expected to announce Phase 2A data for one of its drug products…
And right now, it looks like it could run higher.
However, I’ve got a specific area where I want to purchase the stock… and I’ll be sure to let my clients know about it.
If you’re struggling to find trade setups in the market right now… there is a simple trading system you can start using as early as tomorrow… one that could take you from zero to hero real quick and help you consistently find explosive opportunities.[Ed.note: Kyle Dennis runs BiotechBreakouts.com. He is an event-based trader, who prefers low-priced and small-cap biotech stocks.
Source: BiotechBreakouts.com | Original Link