9 Biotechs and 1 ETF near green line break-outs (all-time highs): $AGIO,$ALXN,$BSTC,$CMRX,$ENTA,$ILMN,$JAZZ,$KITE,$RGLS,$BIB

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Most of the stock gurus whom I respect have written that one can make the most money by investing in   companies that have visionary, often revolutionary products. When Nicolas Darvas made millions   in the 1950s he invested in rockets, as the country became involved in a race to space. Other more recent examples are the PC revolution, the internet, and now Elon Musk’s foray into electric cars, solar energy and commercial space travel. Today we are in the middle of a huge revolution in biotechnology as scientists begin to use their understanding of the human genome to make new drugs and medical   treatments never thought possible. There is   a revolution occurring in the biotechnology sector and astute investors who own these firms will be well rewarded when a new drug or breakthrough treatment is announced.

A major way that I have developed to alert me to promising new stocks that are being heavily accumulated is my green line technique. On a stock’s monthly chart I draw a green line at the highest price the stock has ever reached and has not surpassed for at least 3 months.   The green line signifies the top of a base or consolidation period at which the stock has rested for a few months. When a stock pushes through its green line top, especially on unusually high trading volume, I take notice.

I have put together a list of 9 biotech stocks and one ETF that have recently passed their green line tops. These are stocks which I then research to assess the probable developments that are causing buyers to push them to all-time highs. Biotechs often do not have earnings. It is the possibility of future earnings to be derived from newly developed exciting products that ignite buyers’ imaginations. I just want to hitch a ride on a rocket. By the way, I own some of these stocks.

Their weekly charts, in alphabetical order:

AGIO12072014ALXN12072014BSTC12072014CMRX12072014ENTA12072014ILMN12072014JAZZ12072014KITE12072014RGLS12072014And one leveraged ETF…..

BIB12072014The GMI remains at 6 (of 6):

GMI12052014

 

25th day of $QQQ short term up-trend; Warning signs appear

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A few warnings signs flashed on Friday.   While 82% of the Nasdaq 100 stocks rose, only 31% of all U.S. stocks rose.   As I tweeted during the day, the Worden T2108 fell on Friday in the midst of the rise in techs and was a cause for concern.   (My rare tweets can be followed: @WishingWealth) .   Another ominous signal was the way the QQQ traded above its upper BB. See this daily chart.

QQQdaily11282014Since the bottom on 10/16, there have been no periods with two consecutive down days. And the QQQ rose on 8 of the last 10 days. It doesn’t get much better than this for the bulls. I suspect we could have a decline back to the lower BB, around 101, this week. And then we might not.   To protect myself, I bought some insurance in the form of December call options on SQQQ.   SQQQ aims to rise 3X as much as QQQ declines. This option position will serve to hedge my long positions. And if my stocks rise and the calls expire worthless I will be very happy.   Who frets about paying home insurance when at the end of the year their home did not burn down! Was the insurance wasted money?

The GMI remains at a strong 6 (of 6).GMI11272014rev

 

 

21st day of $QQQ up-trend; indexes may be over-extended

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The three market index ETFs I follow (DIA, QQQ, SPY) all opened outside of their upper daily 15.2 Bollinger Bands and closed back below them. This may represent extremely over-bought conditions. A down day on Monday would likely indicate some retracement of the recent rally will take place. I am therefore very cautious about the immediate continuation of the rally. Check out this daily chart of the QQQ.

QQQBB11222014

Nevertheless the GMI remains at 6 (of 6).

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