Biotech Wreck? Here’s an analysis of Regeneron (REGN). Otherwise known as the “Danger Will Robinson” pattern. (March 09, 2016)
REGN IBB REGN
Regeneron ( NASDAQ:REGN ), the reason I’m going over this is because this is a completed pattern, or it’s getting close to completing anyway. This is a wedge pattern, it’s a continuation pattern where the stock had been trending lower. This was one of the MONSTER stocks during the entire bull market, one of the BIGGEST gainers. But after the stock broke through support here and started trading up, it basically formed higher highs and higher lows but they’re kind of converging, that’s known as a wedge pattern. Prices typically don’t do that, sometimes they do, but most of the time what they do is exactly what Regeneron ( NASDAQ:REGN ) did, fall out of the wedge here. So when I look at this I see that what this is really is just a continuation of the downtrend. This is support right here, 350.00, 360.00 so this isn’t a stock that you want to short right now. It’s definitely not, in my view, a stock that you want to be long either. This is a stay away from stock. This could go down to $45.00, it’s been there before (I’m joking, it’s not going to go down to $45.00). But look at the move that this has made, this is under distribution, PERIOD, PERIOD. It’s under distribution. Nobody that’s smart is buying this stock, except probably some shorts who are seeing this, and it could fall as low as the mid 350.00s and then get SOME kind of bounce. We don’t know how much and the stock could just keep going.
But here’s my point: It is not a stock that you want to be buying, it’s trending down. Look at the moving averages, it’s below both of them. It’s below the 20, the stock’s in a downtrend, there’s a lot of pain in this chart. All of this, all of these folks are in pain. From where this stock is right now there’s been like FOUR days where somebody could have bought this stock on an intraday basis and still be profitable. And you know what? Every single person, every single fund, every single anybody who bought this stock, where they’re still profitable, is nervous right now. That’s just the way that I look at these stocks. You can say, “Algorithms and this and that. Algorithms, “schmalgorithms”. Try saying that fast a lot. They trade off of human emotion and they also trade off of charts. And where do you think charts come from? They come from the emotions, which is basically a reflection of financial fortunes of traders. So this is a stock that you want to stay away from. The biotech ( NASDAQ:IBB ) in general is a sector you want to stay away from. The trade today on Regeneron ( NASDAQ:REGN ) is NO trade. Look for a short bounce here because that’s just what stocks do. But the trend is down so you use any bounce as an opportunity to get out of that stock.
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