Happy Monday!
I’d bet that after last week’s performance in the XBI and IBB, the biotech bulls are still smiling. And rightfully so, after all, the bulls had to withstand a downtrend lasting over a month before getting a sign of a reversal.
When that sign arrived, it arrived in a big way.
On Friday, the XBI closed the day up 4.78% and the week up 5.19%.
On December 6th, notice how the XBI put in a clear reversal candle. After that day, the XBI rallied towards the 20d MA. However, it could not firm up and hold above it. The XBI pulled back and made a new low by $0.04, and in doing so, put in a double bottom.
Friday’s price action and close are significant because the XBI closed above the 20d MA on increased volume.
Going forward, I would like to see the XBI hold above the 20d MA and make a push towards the 50d MA, which is currently at $121.33.
This action is positive for the sector and specifically optimistic for small-cap biotechs. I am encouraged by the price action and opportunity I saw last week in small-cap biotechs, and I am confident about the potential for ample opportunities in 2022.
But there’s still some year left, gang, and earlier this morning, I sent out my Weekly Watch List to my members, outlining my current holds and new additions to my list.
One stock, which I have written about before, is on my Watch List again.
OPKO Health, Inc. (OPK)
OPK closed the day up 10.53% on Friday and 13.95% on the week.
According to Yahoo, OPK engages in the diagnostics and pharmaceuticals businesses in the United States, Ireland, Chile, Spain, Israel, Mexico, and internationally.
OPK, per Finviz, has an average target price of $6.70 set by analysts covering the stock.
Market Cap: 2.72B
Float: 410.71M
Short Interest: 11.98%
Catalyst Dates, Events and Drug: RAYALDEE (REsCue) Mild-to-moderate COVID-19, Phase 2 trial enrollment completed, topline data expected by the end of 2021. Somatrogon (hGH-CTP) Children- growth hormone deficiency. PDUFA date extended three months to January 2022.
Recent News:
- 29 November 2021 BioReference Laboratories Announces Readiness for COVID-19 Testing if the Omicron COVID-19 Variant Emerges in The U.S.
- 8 December 2021 OPKO receives U.S. FDA approval for the 4Kscore Test.
I like how OPK could hold above all essential MA’s and then broke out on Friday on the daily chart. This signals, to me, that the stock has the potential for momentum to the upside.
Going forward, I will be watching to see if the stock can continue to base over $3.60s firstly and $4 as the most immediate level of support.
If the stock provides an opportunity to get long for a continuation move higher, I will look for a target of $5 -$5.50, targeting the highs from March, and have a stop placed around $3.45.
