The indices are close to flat, breadth is slightly positive and pockets of positive momentum are nearly nonexistent. It is downright tedious if you are trying to put some money to work, but it's a great environment for productive waiting. This is the time that you should be plotting and planning some trades. You don't act now. You just start thinking about how things might develop and how you will handle some trades if you have the opportunity.
There are two groups that I'm watching closely. The first is biotechnology. One of the main market themes of the election season has been that, if elected, Hillary Clinton is likely to press for price controls on drugs. This has caused pressure on a wide swath of pharmaceutical and biotechnology stocks.
In many cases the logic is deeply flawed. While there are some bad actors that have raised drug prices to unconscionable levels, there are many biotechnology names where pricing isn't even a meaningful issue in their development. Even if Hillary Clinton were to win, there is no assurance that drug-pricing changes will be as onerous as the market seems to think or that they even will occur. These stocks are likely to come back as the election results cool off and Washington, D.C., goes back to the business of doing nothing very meaningful.
Some of the names I like in this sector include Celgene (CELG) , Aratana Therapeutics (PETX) , Global Blood (GBT) , Trillium Therapeutics (TRIL) and Array Biopharm (ARRY) . There are plenty more but these are on my radar and will the first names I like at once the election results are in and the issue of drug pricing fades away.
Another group that I will watching is oil. Oil is under pressure as the latest OPEC deal falls apart, but there has been some improvement in small-cap oil and gas names, and I'm looking for some opportunity there as the political landscape shifts again. One low-priced stock that was looking good until the last couple of days is Approach Resources (AREX) . That needs to recover the $3 level before it would be interesting.
A stock I mentioned previously that may benefit from a change in politics is Hudson Technologies (HDSN) , which is an environmental play. It is doing nothing right now, but I'll be watching for improvement.
This market is not at all interesting, but the opportunities are developing and now is the time to start thinking about them.
