Looking for a biotech stock? Try Biogen ($BIIB) (April 24, 2020)
BIIB
I want to look at Biogen ( NASDAQ: BIIB ) here. We have had a pretty good week for Stock Market Mentor as far as our Growth Stock List goes. But I want to talk about a biotech stock here, Biogen ( NASDAQ: BIIB ), and this is why: Here is what I don’t like about this pattern, it is really heavy. This is a big steep sell-off, this looks like the aftermath of an Adam Feuerstein article that got debunked.
The stock sold-off really, really nasty like it has before, but it is at this point now where the stock is at established support, like $290.00. That is just less than 4 percent below where the stock is trading right now. Earnings aren’t an issue; I think your trade here on this, I’ll make this really easy, I would buy the stock here. And I would set my stop right there, right underneath the 200-day moving average. These are the kinds of opportunities that you want to take advantage of.
Here’s the thing, this is really important; you are not buying the stock because you think the stock is going to do that. It might, we hope so, right? No. You are buying the stock because it is a low-risk entry. Because you know that if the stock falls below the 200-day moving average then your reason for buying it, which is, I think the 200-day moving average, after 3 days of tests, I think the 200-day moving average is going to hold so I am buying that stock. That is why you are buying that stock.
If the stock falls below the 200-day moving average it is not going to cost you that much money because you are buying so close. So your reason for buying the stock is NOT because I think I am going to make a gang of money. Instead, it is because I think the stock is going to bounce, it looks like a really good bounce pattern AND I don’t have to risk much money in order to put myself in a position to make money.
So that’s the deal; it’s a huge difference in why you are buying a stock and how you are buying a stock. You are not buying a stock to make a bunch of money. You are buying a stock to not lose a lot of money if you are wrong. If you can be thinking about it in those terms the profits will take care of themselves.
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