Giving Biogen Another Go

 | Jan 26, 2014 | 5:00 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

biib

The last time I recommended picking up Biogen (BIIB) was in mid-December, when the biotech stock put in a healthy pullback, then held above a key support area and started firing off some buy triggers. The stock proceeded to rally $45.11, to the 1.272 Fibonacci-based target at $306 -- and I always suggest either exiting or trailing up stops at this point, so if you were in the stock my guess is that you booked some profits here. Biogen then climbed to $315.38, just about meeting target two, the 1.618 extension, at $316.46.

When a technical pattern has worked in the past, we generally want to keep a close eye on it until the pattern stops working, so I now want to set up another couple of key areas to stalk in Biogen for an additional potential buy entry.

I am projecting these levels in the same way as I've done before: Namely, to establish support levels I'm using multiple 100% projections -- measured moves, or what I call "symmetry" -- of the prior declines within the uptrend. These are illustrated on the chart below, along with a few Fibonacci-based retracements of prior swings that overlap these symmetry projections, thus further strengthening the support areas.

Biogen (BIIB) -- Daily
Source: Dynamic Trader

Two levels currently stand out, and they come in at $292.74 to $293.71 and $281.94 to $287.81. These are the zones where I'll be looking for a possible reentry. If one of them is tested, and if Biogen ends up holding above it, I will start watching for buy triggers on either a 30-minute chart or the more aggressive 15-minute chart. My risk can be defined in one of two ways: either under the low that the stock has hit prior to a trigger firing off, or just a bit below the low end of the Fibonacci price-cluster zone.

If Biogen ends up violating these key support levels, I will back off the buy side until further notice, and consider the setup a bust. However, my hope is that the recent broad-market weakness will provide us with this nice potential buy opportunity within the next week or so.

Please refer here for more information on trade triggers, and here for general guidance on Fibonacci trade setups.

Columnist Conversations

I set you up for the trading Week Ahead from the floor of the NYSE with Peter Costa of Empire Executions... Ha...
LNKD is trading $226.08, up 3.1% with IV30™ up 0.4%. This is a stock price and volatility note on a so...
From Moody's: "Dynegy announced that it expects to finance the transaction with $5 billion of unsecured notes ...
Kohl's is beginning to lose its upside momentum this week. The stock has been in hyper drive since the ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.