Biotech has been strong for a while, Scott’s watching $SRPT – December 1, 2022
IBB SRPT
This is Scott with your Chart of the Day. I want to talk about Biotech ( NASDAQ: IBB ).
I typically don’t trade a lot of biotech stocks just because there can be some inherent risk with FDA stuff that comes out, t is very headline driven. But I will note that Biotech ( NASDAQ: IBB ) has been strong for really the last couple of quarters here. It was the first, that I am aware of, to get above the 200-day moving average and it did it before almost anything else.
Biotech ( NASDAQ: IBB ) has been leading some of this rally here, and it is making a higher high compared to all of this other price action. It is definitely an area we are watching, at StockMarketMentor.com. In fact, Dan Fitzpatrick added a few biotech stocks to his Active Trade List just over the last few days.
Now, one of the ones that I am looking at is SRPT, Sarepta ( NASDAQ: SRPT ). Sarepta ( NASDAQ: SRPT ), as you can see, again, has been kind of following a lot of the market, it has been kind of low. Evidently, it had a big gap down here in 2021.
And again, that is kind of the inherent risk with biotech stocks, this kind of thing can happen, so you definitely want to have stops in place and respect the chart. But I do note that it, again, is making a higher high here in terms of price action. And it is at its highest level since this big gap down and flush around.
So what I would look for here on Sarepta ( NASDAQ: SRPT ) is a potential gap fill. We want to see the stock continue to follow this 8-day exponential period moving average. And ideally, over the next couple of months, maybe gap fill to that 160.00 zone, which is about 30 percent higher.
I don’t think it is going to get there overnight but, again, for a longer-term swing trade, it definitely has some potential. So this is one that I am watching here, but I first want to see if it can get above and stay above that 124.00 level, get above there and do it on volume. And ideally, stay above these 3 moving averages, the 8-day, the 21-day, and the 50-day.
Now it can whip around within consolidation, so if you are looking at this stock you have just got to know when it starts to consolidate do you want to sit through that consolidation? Or do you just want to take the risk off and then draw another line and say, Okay, I will buy it back when it gets back above there?
So there are different ways to trade this but that is what I am looking at for a potential longer-term swing trade here for Sarepta ( NASDAQ: SRPT ).
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