The Biotech sector IBB, XBI, FBT etc. is still the best performing sector out there. The Semiconductor sector SMH, is acting very strong and is somewhat more interesting as single stock risk is generally less pronounced as opposed to individual Biotech stocks that disappoint. But Biotech is outperforming Semiconductors right now. So one simply cannot ignore the sector. That being said a Biotech stock I have been monitoring for quite some time looks like it is about to run right now.
I am talking about RGLS – Regulus Therapeutics. I mentioned I’ve been monitoring this stock for a while. You guessed right, it popped up in my scans the day it printed a game changing gap to the upside. It is really that simple. If you run scans and search for stocks with abnormal activity and huge volume, you will find all future big winners. Scanning alone is not enough though. It is simply a means to replenish watch lists. Then the hard work starts. Doing further research, being disciplined and patiently waiting for the stock to put in a consolidation and then entering a position once the stock flashes signs it might be ready to resume its new uptrend. I can only speak for myself, but the hard work part means I go through more than a thousand charts every day. For me personally there is no other way to get a feeling for the market. Enough said, on to the charts.
Click on RGLS chart to enlarge:
As you can see in my chart annotations RGLS – Regulus Therapeutics is displaying all the character traits I am looking for:
- High short interest and low float stock
- RGLS is trading above all the significant moving averages (20, 50, 100, 200)
- The bullish descending wedge pattern has morphed into an even more bullish ascending triangle pattern
- The stock displays an initial gap up and a thrusting move on huge volume, consolidated and is now about to resume its uptrend
If you are a regular reader you know what I am going to say now. Thrusting move, consolidation, resumption of the trend leading into the consolidation pattern in ABC pattern style. Simple straightforward analysis. There is really no need to overcomplicate things.
Remember: I am simply playing the odds here. There are no guarantees individual trades will work. Keep trading set-ups offering superior odds and keep managing risk. You will end up owning a few super winners every now and then. RGLS – Regulus Therapeutics sure is displaying all the needed ingredients. A great technical set-up and proper pattern pressure for RGLS to develop into a potential monster performer.
Show me the charts, and I’ll tell you the news. – Bernard Baruch
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