I call my edge trades profit buckets. They are highly profitable setups or pattern that have proven to be consistent winners.
You see, while everyone is talking about all the volatility we are seeing in the overall market. It’s like this almost everyday when you are trading biotech stocks.
That’s because the stakes are so high for companies in the space.
If you look at the top movers on any given day it’s either going to be a penny stock or a biotech.
For example, RKDA was one of Wall Street’s biggest movers yesterday after it received USDA approval for its drought-tolerant soybeans.
Shares of the stock closed 124.38% higher on the day!
And you know what?
There are more FDA announcements on the way.
And in this post, I want to go over the upcoming FDA calendar and show you where the next potential big winner might be, and talk to you a little bit more about my process for finding this explosive stocks.
Upcoming FDA Calendar Has Some Opportunities
For the most part, one of my favorite strategies is the catalyst runup.
Well, it works in any market environment and it’s the one that’s helped me the most as I turned $15K into $7M in a few short years. The idea behind the strategy is to find upcoming catalyst events and pair it with a chart pattern.
You see, generally traders and investors will look to buy the stock heading into the event – the catalyst runup. However, for the most part, if I don’t feel strongly about a company releasing positive data… I’m going to sell before the catalyst date to stay on the safe side.
If you go to BioPharmCatalyst, you’ll be able to see a list of biotech and pharmaceutical companies expected to release data soon.
Remember, we want to spot these catalysts ahead of time and pair it with a bullish setup.
For example, one stock that looked interesting to me was Nabriva Therapeutics (NBRV), which has FDA approval date on August 19 for its intravenous and oral treatment of Community Acquired Bacterial Pneumonia.
Once I spot the catalyst, I like to use Finviz for a quick overview… and I alert my clients about my trading plans in these stocks before I get in.
Now I’ve actually used this same strategy time and time again… and recently, I was able to lock in $25K recently on an FDA catalyst runup play.
$25K Win in CHMA
Again, all I was looking for in CHMA was an upcoming catalyst and bullish chart setup.
I noticed the company was expected to report Phase 3 data for one of its treatments in 3Q 2019. Well, I knew there was an upcoming catalyst and that news could potentially attract more investors. Thereafter, all I needed to do was pair it with a bullish setup and create a trading plan.
I noticed CHMA was trending higher and pulled back to a support level… and actually rebounded.
Let me break it down for you into three simple steps:
- Find a catalyst event. You want to be able to find a fundamental reason the stock could go up, like an upcoming FDA approval date or data release.
- Pair the catalyst with a bullish chart pattern.
- Look for credibility. In other words, you want to see whether insiders have been buying the stock and what percentage of the company is owned by institutions.
Now, if you want to learn more about my catalyst runup strategy and how to start profiting off them using my simple three-step process… then you’ll want to check out my latest breakthrough Fortune Forecaster.[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