Trade Alert: Biotech

Three bullish options trades on biotech stocks, two of which appeared in our top ten names last night.

Keeping An Eye Out For Market Rotation

As regular readers may recall, our system’s top ten names have outperformed the market significantly since I started this Substack in December of 2022. So far, we have 6-month returns for 61 weekly top names cohorts, and, on average, they returned 21.22% over the next 6 months, while the SPDR S&P 500 Trust ETF (SPY 0.00%↑) returned 12.83%.

Because of that, I’ve used those top names as a source of options trade ideas recently, in addition to buying and holding the underlying shares as part of our core strategy. Those top names also sometimes suggest market rotations, when we see multiple names from the same industry appear on the list. In last night’s top names, we had two biotechs appear.

Our Three Biotech Trades Today

1. This was one of our four bullish trades last week. It dropped this week on news of subpar results on one of its drug candidates, but it has a number of other drugs in its pipeline and very strong fundamentals, including a valuation rating of 7, via Chartmill.

2. This one appeared on our top names last night, and has a valuation rating of 6, which is high for one of our top names, which tend not to be value names.

3. This one just got one of its drugs approved for Mpox (formerly known as Monkeypox, a disease targeting mostly gay men, but also some children and dogs recently).

Details below.

Bullish Biotech Trade #1