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Technician Picks Oversold Biotechs for Large Potential Trading Bounces

Now that there has been a biotech bloodbath seen of late, many fundamental and technical analysts have been looking for stocks that either are grossly oversold or are now greatly undervalued. A report on Wednesday from Janney Capital Markets has targeted several companies it believes are now grossly oversold.

24/7 Wall St. would warn readers that this is a shorter term trading idea from Janney’s team and not a long-term investing idea based on fundamental research. That means these are very short-term views, and they will have absolutely no meaning whatsoever after a few days or a month — or less if the selling pressure resumes and takes out stop-loss areas. Janney Capital Markets even made many such warnings here, and that was if the S&P 500 rolls back over and takes the biotech exchange traded funds (ETFs) with it.

The focus here was on companies with very oversold near-term charts, but where the long-term charts were supportive of trading bounces as well. Janney listed seven seven such stocks, and 24/7 Wall St. decided to focus on the four larger market capitalization names to avoid small cap stocks. These stocks all traded handily...