The set-up: Last Friday, Portola Pharmaceuticals got an FDA approval for their main pipeline item, BevyxXa. You don’t really need to know what BevyxXa does (it is an oral drug that treats deep-vein thrombosis and pulmonary embolisms) to know that the news sent the shares up 50 percent.
The company said at a conference call that they are expecting a billion dollars in revenue to come in as a result. As a result, Portola was on everyone’s lips Firday, and again this morning.
The follow-up: This morning, pre-market, you had Citibank upgrading PTLA, with a price target of $78 per share. They will not be alone here; there will be more upgrades this week and all of them will have price targets in the $70s.
Note: I’m not in this stock and I’m not going to be. It’s not that I don’t believe my eyes, it’s that I look at the entire market trying to see what’s out there and learn from it, but then I keep all of my trades in my wheelhouse. This is just an opportunity so obvious to me – and perfect for someone looking for a longer-term trade – that I had to say something.
The play: Buy the stock below $60 per share. I think you will be looking at a $70 stock in the next six to 12 months, if not sooner.
Taylor Conway is the lead day trader at PennyPro.com. He is a short-term day trader of stocks and ETFs. At the time this article was published on RagingBull.com, he had no open positions, options or orders in PTLA, has never held a position in the stock, and was not planning to buy or trade it.