How to trade Bio stocks
BioField has been very hot as of late. Lots of stocks bringing huge gains "overnight" and some droping 50% in matter of minutes. These biofield plays can be very dangerous but if you play your cards right, you will be rewarded.
Here are some strategies on playing this stocks:
First and most important is to do your own DD. Once you comfortable with the "FDA play" you need to set your goals for the stock. People love speculation and opportunity to get rich overnight, so most stocks that are due for some news will have a run up towards that date.
Safest way is to buy the stock 3-4 weeks in advance of the due date. Most of the time, the price is still low and not much interest shown in the stock. Once the run up happens, sell the stock before due date.
Second way is the riskier way, which means you hold thru the due date pending the news. At this point it becomes more of a lottery play, especially if you are waiting on FDA approval. If you doing that, make sure that you rely on your DD and feel very confident about the stock.
Most of the stocks once get approved or etc, will sell off after initial jump. Generally they recover in coming weeks. Make sure you set your price targets.
If you holding the stock, please always be aware of other factors that can affect the stock during "the waiting" period. Examples would be like: conference calls, presentations, Advisory committe meetings...
Just remember that nobody ever went broke by locking in profit, and "easy money" do not exist. Always do your own DD, since this is your money you are investing. Lots of investors get greedy with these stocks, which usually doesnt end up being a good thing.
Good luck with FDA plays!!!
All of the above is my personal opnion.