Healthcare has taken a well deserved pause this week with the XLV lower by .2% heading into Friday. It was preceded by a 6 week winning streak which rose by nearly 9%. Of course a rising tide lifts all boats, but the best of breed names advance more than most. Below we look at how the recent IPO AVXS could have been added to along the way pyramiding a position (I have NO position in the name).
In our Wednesday 10/12 the round 50 number was influential. Stocks that can be bought as they retest former breakout triggers are AVXS. AVXS is a recent healthcare IPO that has risen 171% since inception last February. It obviously has a small sample with earnings with last one higher by 16.4% on 8/12 and losses of 4 and 5.4% on 5/13 and 3/17. The stock is higher 2 of the last 4 weeks which is a bit misleading with gains of 26.7 and 15.3% ending 9/16 and 10/7 (the 3 weeks ending between 9/16-30 all CLOSED within just .51 leading to explosive last week jumping 15.3%). It screamed higher by more than 70% during a 7 week winning streak ending between 4/29-6/10. AVXS took out a cup base trigger of 47.86 in a 4 month base Monday and enter on a retest at 48. Notice the 50 number coming into play here.
Trigger AVXS 48. Stop 46.
In Wednesday's 2/12 Game Plan the 60 number was examined. AVXS is a healthcare play higher by 24% YTD and 217% over last one year period (just turned one year old). Earnings have been mostly lower with losses of .9, 4 and 5.4% on 11/11, 5/13 and 3/17 and a big gain of 16.4% on 8/12 (it REPORTS 3/15 after the close). The stock is higher 5 of the last 9 weeks including a 15.9% gain week ending 1/6 and back to back 7% plus gains ending 1/27 and 2/3. It is now 18% off recent 52 week highs not long after an ugly bearish engulfing week ending 11/18 which fell 9.2%. The round 60 number has been problematic on a CLOSING basis with 4 session trading above intraday since 1/26 but no CLOSES. Enter above 60.25 and add to through cup base trigger of 72.82.
Trigger AVXS 60.25. Stop 58.
Taking a present view on AVXS last night it rocketed higher and the 13 month old publicly traded name is up by 13% as of this writing. Since the week ending 12/23 it has benefitted from the rotation into healthcare rallying 35 handles top to bottom. The best course of action now is to wait to see if there is any digestion here of this big move and perhaps a flag formation at the round 80 handle will form over the next week. Be patient. Do not trade if there is no reason too.
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