How I'm Trading Some Big Winners and Losers as Action Turns Weak
Some names in the biotechnology are enjoying interesting trading under the surface.
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Market action is mixed, but there is still plenty of action under the surface.
Although about 58% of stocks are in positive territory on Wednesday morning, market action is mixed with some pockets of profit-taking. Dip buyers are not exhibiting much energy so far, but support is holding, and the selling pressure is fairly mild.
The number of new highs has contracted to around 125, and the list of stocks moving up more than 10% is not quite as long. Some of the recent leading groups, such as data centers and quantum computing, are pulling back.
I'm managing the position closely and reducing a few positions. I'm not finding many new entry points, so my cash levels are increasing. That is just a function of stock picking opportunities rather than a bullish or bearish call.
Two names that I have discussed several times are up very sharply on Wednesday. UniQure QURE announced very strong results for its treatment of Huntington's disease, and ClearPoint Neuro (CLPT), which provides a delivery mechanism to the brain for the treatment, are up 185% and 50%, respectively.
This is a good illustration of why I speculate in the biotechnology sector. There are the inevitable duds like Humancyte (HUMA) and Beyond Air (XAIR), which I have dumped with some hefty losses, but the big winners will more than offset the losers if you use active money management. Biotechnology has substantial risk, but that means it also has substantial rewards.
QURE has been particularly volatile due mainly to concerns about the shifting personnel at the FDA. Their Huntington's Disease treatment still has to be approved by the FDA, but the data is far better than expected. I took some partial profits on QURE and CLPT, but will continue to trade them aggressively. The good news is that a major risk has been removed, so they are likely to provide new trading opportunities as the chart develops.
The QURE news bodes well for other names in the gene therapy space. One name I highlighted previously is Rocket Pharmaceuticals (RCKT). It was hit hard when a key study was halted due to a death, but the FDA has allowed the study to reopen, and the FDA is now more accommodating to gene therapy.
Despite the positive news, RCKT has not recovered very much, but it is seeing some sympathy buying on Wednesday because it is a gene therapy name like QURE. I've added to my position and am looking to build that position further as key data approaches. There was a recent insider buy by a director of 10,000 shares at $3.41.
Overall market action is weak on Wednesday, but there continues to be interesting action in individual stocks.
At the time of publication, DePorre was long QURE, CLPT and RCKT.
