While the market anticipates House vote here are two ideas to consider ONCE XBIT 03-22-2017

Market Analysis

As the house vote to repeal Affordable Care Act (ACA) approaches, markets are bracing for an impact in case the GOP cannot coalesce majority republican vote. Today markets were in a holding pattern with SPY staying above 50 day Moving average. Some media outlets are already predicting that could be the case as well. Market lost more than 1%+ yesterday when they caught the wind that there may be hurdle passing the legislation to repeal ACA.

In a way, markets are interpreting this as a negative sign and loss of confidence on president Trump to deliver on his promises, most importantly on sweeping business tax cuts. We will have to see how the votes turn out which could likely decide the fate of this rally.

If you remember an earlier blog post published during Snapchat (SNAP) IPO where we quoted a very popular saying in Wall Street -

Buy the rumor, sell the news.

and said that we were in a buy the rumor phase. Now that one of several news are about to come out, we got a taste of what "sell the news" would look like yesterday.

Trade Ideas Recap (03/19/2017)

Let's look at some of the ideas in Tech sector we talked about in last weekends blog post.

  • ALRM – Alarm.com Holdings, Inc. : We said ALRM is a good candidate to go higher and test $33 and then $34.50. The stock went as high as $33.60 on Tuesday only to retrace back during the broader market sell off. ALRM currently trades $31.55 but the idea is still in play as long as $30 holds. I didn't opened any position in ALRM yet but plan to this week.

  • TLND – Talend S.A. : We said if TLND doesn't break above $31 right out of the gate early this week it will consolidate back to $28. Stock trades at low $29 now and I'll be patient to see how it holds $28.

Two ideas to consider

Alright so here are two ideas, I'll be looking at for the remaining of the week. I've used our prospecting engine in combination of our proprietary gauges to identify these idea.

XBIT – XBiotech Inc.

Even though Biotech (IBB) sold off a day earlier, XBIT showed it's strength and continued it's momentum on the back of a positive results (findings from oncology journals) announced during the earnings call regarding it's drug where the CEO said,

But in brief, the published findings show that we have developed a new way to measure activity for cancer drugs in advanced cancer, and that the product of the natural human immune response, our therapeutic antibody, can be used in a way to fight cancer.

However, we have to stay cautious and not hold this too long as there are couple of outstanding issues that has to be addressed regarding fast tracking their drug. You can read further about it in the transcript.

From a technical standpoint the XBIT has made a beautiful run up from below $10. $17 is going to be very critical support for consolidation if the stock retraces but if the demand continues we will likely see $20 and then $25 in the coming weeks.


ONCE – Spark Therapeutics, Inc.

Even though the future looks fairly solid for Spark as their clinical study looks positive and they are preparing quickly to move forward with their submission in order to get a decision from FDA by end of 2017, the technicals paint a different picture. ONCE has been in a downward channel since testing highs in late February. I'm anticipating some consolidation around low to mid $50s and then testing support of $45 in a week or so.


Alright, That's it for now folks. Happy and Profitable trading for the rest of the week.

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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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