Recap on biotech sector rocky close last week due to Amgen influence AMGN MDCO ESPR 03-19-2017

Sector Recap

The biotech sector closed down -0.46% last Friday with IBB closing down -1.11% to $295.28 after flirting with $300 couple of times in the past two weeks. Now it's very likely that IBB will test the near term support of $294 and decide where to go from there. Amgen Inc (AMGN) which is the top holding in IBB with 9.11% asset allocation was critical in pulling the sector down after they reported clinical details from its FOURIER study. This in turn brought down other biotech stocks such as MDCO and ESPR as a knee jerk reaction right out of the gate.

Let's take a look at IBB chart from a technical perspective. Normally to properly analyze an ETF we should look at the major underlying assets but let's take a look at ETF at a high level.

IBB-03-19-2017-2-technical-analysis

Trade Recap

Let's do a quick recap on the trades that I took as a result of the Amgen news on Friday.

MDCO – The Medicines Company

MDCO opened down $12 on Friday which seemed like an overreaction to AMGN news. Buyers stepped in as they saw a buying opportunity but weren't able to push and hold the price above $45 which was a support (acting as a intraday resistance now) from early February 2017. I saw the opportunity to go short at $43.50 and covered at $42. See chart for details. There was also a long opportunity which I didn't took as the price recovered nicely intraday.

MDCO-03-19-2017-technical-analysis (chart - freestockcharts.com)

ESPR – Esperion Therapeutics, Inc.

ESPR opened in a similar fashion as MDCO, gapping down by almost $8 only to have buyers step in to push the price higher in the first two hours of trading. I found a short entry at $24.50 on lower high formation at an overbought condition intraday and covered at $23.50.

saadey shared an idea on StockTwits

ESPR-03-19-2017-1-technical-analysis (chart - freestockcharts.com)

WB – Weibo Corporation

I took a short position in WB looking at the chart below last week as I saw breakdown below support anticipating price to trend lower with risk at low/mid $50. The price has started to hold $50 and may test mid $50. I'll give this stock another week or so to see if the price starts to move in my direction before cutting this out as a loss.

WB-03-12-2017-technical-analysis

Alright, That's it for now folks. Stay tuned for the next blog post to checkout ideas I'm considering for the next week (03-20-2017).

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Image credit - images.bidnessetc.com | disclaimer.

Saadey (साँढे)

compsci background, high perf software engineer by profession, fintech fanatic, entrepreneurial, food lover, soylent, traveler, NBA fan, geek, and avid learner.

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