Waiting for a good entry on a biotech stock? Here’s one on Regeneron (REGN) (June 15, 2015)
I want to look real quick here at Regeneron ( NASDAQ:REGN ), you can see why. This stock is now giving you a pretty good entry point here. It hasn’t hit the 50-day moving average since it has been in this multi-month consolidation. It’s kind of been a text book uptrend where you get the breakout then a pullback giving those that missed the first time a chance to get in. Since that time its just been going higher and higher.
Cramer had posted an article, I think it was last Thursday so he was a little bit early, but he was talking about how the company had had a negative review, or the market was selling off because they thought that company had had a negative review by the FDA on a drug that they’ve got in the approval process. But that’s actually not the case. What was really shown was that there is some benefit and it’s worth billions, in Cramer’s view, on a drug that they’re working on. So the stock’s still gone down further but it’s given us a good entry point today.
So my suggestion is you look at this stock, how it tagged the 50-day moving average, 484.51, the low was 482.92. So basically the stock hit the 50-day moving average and bounced right off of it. We like this because our idea would be, this stock, the bad news, whatever that is, is now priced in and buyers are coming for the stock. So if that’s the case I want to be buying along with the rest of those buyers because I’m early.
I’ll put a stop right about there, and the reason is because if I get stopped out, well then I’m obviously not early, I’m obviously not timing this right there’s something else going on. So you can put a stop there with confidence because it’s only going to get triggered if you don’t want to be in the stock anyway.
So the whole idea here is you want to buy uptrending stocks that give you a good opportunity to define your risk and that is what Regeneron ( NASDAQ:REGN ) is doing right now. This is a much better way to trade than just buy the stock at some arbitrary point and then place a stop and think that’s good trading because your placing a stop. It’s not. It’s actually basically a sure fire way of getting stopped out, so lets not do that, lets buy right, define your risk and go make some money.
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