Investing in Bio stocks can be tricky at best. Never is it more important to do your due diligence than when looking into investing in a Bio stock. These stocks move very rapidly when they move and have extreme increases and decreases depending on the results of drug trial phases.
This is my opinion.... Bio stocks are risky and it takes a lot of guts to play them.
If you dont have the stomach for them and dont yet have the ability to trade emotion free and be patient, then my suggestion is to stay away from Bio stocks.
My approach to Bios is pretty simple as far as my entry is concerned. I of course look at the chart and get an idea of where the bottom is then I set my bid price.
Ultimately I like to start playing the stocks in Phase 2 or later and 3 to 4 weeks ahead of completion of that trial. Having my postion maintained well ahead of the news of the results in the phase allows me to get out quicker once the stock begins to move.
As far as a target gain percentage goes it just depends on how the stock moves.
I watch the RSI continuously to determine the buying or selling pressure on the stock. Once I get a feel on the technicals of the stock then I determine my selling price based on that.
This is where it is so important to not trade on emotions as we can easily get caught up in wanting more once the stock gains momentum. Dont get GREEDY. That is a very important rule to insure not getting caught losing gains once the stock runs out of steam. These stocks move just as quickly on the way down as they do when they are screaming upward.
So in conclusion....... Do your DUE DILIGENCE and never take your eye off of the ball EVER
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