Winning

Winning

Thursday, June 18, 2015

Ready to roll the bones>RDUS and BMRN

Here is an example of two pharm stocks that have jumped on data and the drug is not yet at market. BMRN had a phase 2 result today (more phases to go) about potentially preventing dwarfism in children. RDUS got done with a 25 month study on Osteo.
Neither one of these drugs are currently at market and can be yanked at anytime in the approval process without making a dime.
They both have Cramer all over them as well as everyone else, and have already risen in line with the price targets.

Now both of these drugs are showing breakouts in thier charts:



















Typically breakouts are very dangerous to invest in as they tend to keep going. However, the underlying factors might be an investing opp as these stocks might stumble. Also, I don't want to miss anything: These increases are due to forward thinking. It would be different if these stocks just got FDA approval and people knew for sure that this was it, here comes the money. But the future is not yet set for these drugs, more hurtles and clearances are required by the FDA before they come to market.
So: We have two different opposing forces here. Which one will win out? Will the end of day traders pile on this overnight? Or will people come to thier senses and the prices will wander down? I am of the sneaking suspicicion that the stock on the right, BMRN is going to continue to rise. But the candle on RDUS on the left has a tail on top showing weakness in attempting to go higher but failing.
However, I don't want to miss anything.
At a roulette table or craps table doubling down after a loss is a dumb move. The house still has the overall advantage against you. However here, I have the advantage, because I know these stock are in overbought territory. Just how far the public is willing to stretch it is the question. And God did not put me here to play it safe and live in a crappy apartment with a mediocre life, so I am going to do the following:
A half trade, or 50% of what I would usually swing into a trade here on both. If they drop, fine, I exit the puts. If they climb further, I can then watch the technicals and have a good idea when the top would be. Then at that point I would place another put effectively doubling down. But at this point I am ignoring the technicals and reading the fundamentals.

Orders:


As for RDUS: Short at 59.90.


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