This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Time Is Right for These Seven Biotechs

On Aug. 9, the Amex Biotechnology Index (BTK) hit what is likely to be a bottom for the season at 448. If this year is like most years past, investors can expect the sector to rally through September, pause, then rally again from December through February.

Obviously, the rally isn't guaranteed. One need look no further back than 2001 for an exception to the rule. That year, the sector delivered its customary August rally but petered out prematurely on Aug. 27, beginning a decline that lasted until Sept. 24.

But in most years, biotechs decline in the spring as investors anticipate a summer hiatus in the conferences where new clinical results are announced. They rally in the fall as the conference schedule and the volume of news increases. Investing in biotechs now fulfills one of my basic investing tenets: Buy when the playing field is biased in my favor, and avoid it when it isn't.

Three Reasons Now Is the Time

I haven't owned a biotech stock in Jubak's Picks since I sold Icos (ICOS) on June 10, 2003, and I haven't updated my biotechnology portfolio since 2002. But I think right now is a good time to both buy a biotech (I'll be adding one to Jubak's Picks with this column) and to put together a new version of that biotechnology watch list.

Why? First, seasonality. We're entering the strongest period of the year for biotech stocks. Says who? Yale Hirsch and Jeffrey Hirsch reach that conclusion in their book The Stock Trader's Almanac , as does RealMoney contributor Jon Markman in his book Online Investing .

Second, the sector pulled back from an April 26, 2004, high of 566 on the Amex Biotechnology Index to a low of 448 on Aug. 9 and has since moved up enough to give me confidence that this year has a strong chance of following the seasonal pattern.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ONXX $0.00 0.00%
NPSP $45.97 0.02%
AMGN $144.72 0.00%
INCY $68.36 0.00%
AAPL $93.99 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs