I hope you all had a restful weekend because the volatility and opportunity are here to stay, by the looks of it!
I want to share a new stock that I have placed on my Biotech Breakout Weekly Watch List. However, before I do, I want to discuss something important.
Last week the overall market traded lower, and fear entered the market for the first time in a while.
Not only that, but the XBI closed the week as one of the weakest, finishing down 6.21% on the week.
Last week I mentioned how I would have liked to have seen the XBI hold over $120 support and firm up.
Of course, that never happened, and instead, we saw a break below support and momentum build below that level.
With momentum in the sector to the downside currently, as a biotech bull, I need to be extra cautious when playing breakouts and longs.
The reason is that the overall trend is currently to the downside, so selectiveness, patience, and confirmation are vital.
During periods of heightened volatility and possible corrections in the market, it is essential to see the bigger picture as the market’s overall trend might affect an individual stock.
For example, it might be unlikely that a biotech stock without news breaks out of its range to the upside, at the same time that the XBI is trending lower on the day and holding below support.
In the short term, I am looking for the XBI to bounce off its weekly 200d MA line of around $104. Ideally, it begins to trade sideways and find some stability.
If I look back six years, the XBI has not fallen below the 200 weekly MA line for more than a few weeks before rallying higher and starting a new uptrend. That’s what I would like to see here.
Even in this challenging environment, I am still looking for reversals, breakouts, and monitoring news in individual biotech companies.
This week, one new stock on my watch list is Xeris Biopharma Holdings (XERS).
According to Yahoo, XERS develops and commercializes therapies for patient populations in endocrinology, neurology, and gastroenterology. It markets Gvoke, ready-to-use liquid glucagon for treating severe hypoglycemia, and Keveyis, a treatment for primary periodic paralysis.
Market Cap: 249.39M
Short Interest: 3.5%
XERS, according to Finviz, has an average target price set by analysts covering the stock of $6.25, which is considerably higher than where the stock is currently trading.
PDUFA date January 1, 2022. RECORLEV (levoketoconazole) Endogenous Cushing’s syndrome.
As long as the stock can continue to base over $1.80 In the short term, I will continue to check in on it.
If the stock can confirm a higher low on the daily chart or experience a high volume day and base over the 20 and 50d MA, I might look to get long and target $2.60 – $3 as a target zone.