pharmacist2011 (69.02)

Added new biotech stocks

February 05, 2012 – Comments (0) | RELATED TICKERS: DCTH , FLML , HNSN

I have been trained in biomedical research in biotech/pharma, public health, and healthcare administration. So it is important for me to always have an active watchlist of small cap and large cap medical companies. 

This weekend, I screened the top 50 medical companies with market caps over $100MM that I believe have the potential to run hardest - either up or down in price. How did I identify these companies?  I used the Average Day Range (ADR) of the last 40 days. My thesis is that if they have a high ADR40, then the price is MORE likely to run harder than those who have a low ADR40. Generally, this is a safe thesis to make.  For clients, I would scan the top 200 in the medical/healthcare sector - by highest/lowest market cap, highest/lowest ADR, or whatever was their preference.

Next, I charted all 50 medical companies, and identified patterns I thought were representative of bullish reversals - gave a few of those a 'thumb up'.   This decision process was purely technical - only viewed prices - I knew NOTHING about the fundamentals of the company. 

If a serious investor was inquiring, I would then provide high level fundamental analysis on the companies who had optimal technical patterns that week. I would evaluate company's pipeline, therapeutic area of established and new products, evaluate the medical need for key products and respective patient population, the lifecycle management process for molecules/biologics coming off patent, and would make other evaluations. 

Without having done the fundamental analysis, I am still pretty confident in the bullish potential for this week's picks.