For the fourth straight day, dip-buyers are stepping up on early weakness. Once again, Europe is problematic and there are good reasons for profit-taking, but there are bids under the market and the bears must be a little worried about squeeze action.
On the momentum radar, biotechnology is the star of the show following news of a takeover of Inhibitex (INHX). Jazz Pharmaceuticals (JAZZ), which I mentioned Friday, is following through and other names, such as Medivation (MDVN), Questcor Pharmaceuticals (TICKER) and QCOR Pharmaceuticals (ACHN), are doing well.
I have my eye on a couple of small biotechs that have long bases and should attract breakout buyers if they can perk up a bit more. Raptor Pharmaceutical (RPTP), which has solid numbers, needs to get to the $6.50 level. Early volume looks good
Spectrum Pharmaceuticals (SPPI) has been sitting just under $15 for a few weeks and is seeing OK volume this morning.
VirnetX Holding (VHC), which I mentioned Friday and is my stock of the week, is seeing good buying in the early going and I'm looking for additional entry points.
As long as we hold the morning lows, the hot money will be looking for trades. My gut tells me that we are close to a correction, but I'm not going to do much on the short side until I see more aggressive selling and indications that the dip-buyers are backing off.