Biotech Values

[wallstarb]

Summertime BAD for smallcaps and ESPECIALLY biotech.

Most biotechs will peak about 2 - 4 weeks AHEAD of ASCO - except the names which actually release UNEXPECTED blockbuster type news. Most bios which have big runs from Jan/Feb into ASCO will lose all of the moves and even more the few weeks/months after ASCO.

The reason behind this is that most oncology related stocks save up all their data presentations for this - most will be "non events" - but the stocks move up in anticipation - sort of a buy the rumor - sell the news. The summer tends to be void of any significant large conferences and most companies won't have any major releases of news/data until mid/late fall. The lack of buyers into normal selling causes overreactions as the buyers for the "big news" become sellers and locking in profits. Liquidity is thin and normal buyers will tend to be less involved - causing any significant selling to result in bigger then normal price drops "for no apparent reason"

Don't get caught being greedy and holding the bag in the summer if you are in a stock for a trade or short term investment. Also - don't try to bottom fish too early in the summer - 99% of the time you have significantly lower prices in August - November. Keep your powder dry and take some profits if you are contemplating it.