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3 Small Cap Biotech Trading Ideas For The Week Ahead 17 comments

"When you are winning a war almost everything that happens can be claimed to be right and wise." - Churchill

After getting pasted and posting a 24% decline in the first half of 2016, biotech has been "en fuego" and has rebounded some 18% in the second half of the year so far. The main biotech indices are still down some 25% from their peaks from July of last year. If M&A starts to pick up we could get another significant up leg for the rally.

Small caps led the sector down during its recent deepest and longest bear market since 2008. It should be no surprise that this part of the volatile but lucrative sector of the market is at the vanguard of this rally.

Here are three quick trading ideas among some small cap stocks in the sector for the week ahead.

Portola Pharmaceuticals (NASDAQ:PTLA) is up some 15% since we put out this free report just over a month ago. Its primary drug candidate ANDEXXA is up for PDUFA review on August 17th. Based on trial results and analyst commentary it seems highly likely to be given the green light.

I would not be chasing it here and we have a "buy up to" limit of $27.50 a share for it within the Biotech Forum portfolio which is just under the stock's current trading level. The shares should probably run up to $30 or so in front of its August 17th decision date and might warrant consideration for a short term trade if the stock drops below $27.50 again early in the week. If ANDEXXA is approved, the company has been speculated as a possible desirable takeover target for Pfizer (NYSE:PFE).

Note: In late June, I started my second service on Marketplace called the Insiders Forum. It is priced at less than half of my Biotech Forum offering and will consist of an optimized 15 stock portfolio primarily of attractive small & mid-cap stocks insiders are currently buying.

It is currently the only service of its kind of the 65 subscriptions...