mail.tim.ac

A closer look at the biotechnology sector.

Long
AMEX:XBI   SPDR SERIES TRUST SPDR S&P BIOTECH ETF
There are many sources of opinions and analytics on the Internet, so decided to share with you of my vision:

Biotechnology is a sector where traders are looking for huge profits. For experienced traders (smart money), this sector can provide opportunities for diversification with greater risk and greater returns, but for those who speculate on this, such transactions may be unnecessarily risky. We urge you to follow the recommendation of wide diversification ( and the mandatory calculation of the risk for each such transaction.

Because companies in this sector can be very complex, many traders seek advice from large financial institutions. The buy and sell ratings compiled by these companies can be used as a tool to determine whether to make an investment decision, but after analyzing the history of the major analytics providers in this market, their past recommendations and results, we see that this is not enough to justify entering a deal by a rational investor. Everyone should clearly define for themselves goals for the share, entry, exit, risk and retention period in their portfolio of such instruments.

It is also worth understanding that the volatility in the market of Biotech companies is caused precisely by speculators who want to make quick money and jump off the train as soon as positive / negative news appears. Example - Deferring drug approval by 3 months exposes a 10, 20, 40 percent or more decline in market share value. Whether the financial indicators of the company have changed - no, whether they were refused - also not. Stocks are “weakening” amid expectations, less confidence in success (or they can't stand their nerves), and only those who know what they are waiting for and are ready to fight for it looks at changes in quotations in the short term less painfully.

As for our opinion on the sector, we would refer to the promise made by President Joe Biden during his first press conference in his new role. He noted that research spending in the 1960s exceeded 2% of the country's gross domestic product. Today it is less than 1%. Biden has vowed to change this to get ahead of China.

“We're going to invest in medical research, cancer, Alzheimer's, diabetes, the industries of the future — artificial intelligence, quantum computing , biotechnology,” Biden said. “We are going to make real investments. China is far superior to us in investment because their plan is to own this future. "

I believe in the near future there will be an opportunity to gain a pool of assets from biotech, when many (especially those who have just come to the market) investors and traders begin to get frustrated and turn away from it.


Comment:

Comments

Thanks for writing your research about the biotech sector and how you're thinking about it! We've featured this in Editors' Picks
200 coins
+1 Reply
mail.tim.ac TradingView
@TradingView, Thank you for your rating. I will try harder
+1 Reply
Biden --- ?????????????????????????
+1 Reply
watchtrend Shive1957
@Shive1957, Thanks for your nice explain on XBT chart.
If you have time check our expectations and make a review on it if you expect the same
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Thanks for this. I had been in the ARKG ETF but lackluster performance in the nearer term, I moved elsewhere. I do have a few very speculative and cheap positions that I am holding, but the cost of ownership (and/or loss) is relatively low.
+1 Reply
mail.tim.ac conradkz
@conradkz, I will be glad to try more) And good luck and profits to you.
Reply
Well Done
Reply
On your latest chart... after A-B-C correction there appears to be three(3) waves up with no RSI divergence. Rather IMO, it looks like the latest correction is in fact a Wave-4 correction with a wave-5 still to materialize ( Similar to other BIO-sector stocks and the Us-markets in general). If price reached below 120.87 this scenario would be invalidated, therefore it seem there is a possibility the price action at the top of you channel may hold.
Reply
mail.tim.ac wolffarchitecture
@wolffarchitecture, I tend to agree. My idea was that the sector has not yet completed the full cycle of the 5th wave formation and I would prefer to buy the current (future) corrections.
Thank you for your comment, I will add an update to the chart a little later.
Reply
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