If you’re a stock market trader, then volatility is your friend. Buying and selling stocks for capital gains is a tough business to be any good at consistently, but if you do like to trade, then biotechnology stocks should be a key focus, especially in an economy (and stock market) with minimal growth.
Biotechnology stocks always trade on their own news, but the potential profits are so great with a new drug discovery or approval, the institutional participation within the sector is always solid. One biotechnology stock that has distinguished itself with its stock market volatility is Ligand Pharmaceuticals Incorporated (NASDAQ/LGND); this stock has been up and down significantly for the last 20 years.
If you pull up Ligand’s long-term stock chart, you’ll notice that this biotechnology stock moved countless times from $40.00 a share to $80.00; back and forth with remarkable consistency. A few times in its history on the stock market, the position moved from $40.00 a share to over $120.00. In recent years, the stock pulled back to below $10.00 a share, but it has recently experienced a resurgence. Ligand’s stock chart is below:
Chart courtesy of www.StockCharts.com
Another biotechnology stock that’s proven to be very volatile on the stock market is Chelsea Therapeutics International, Ltd. (NASDAQ/CHTP). This penny stock has a history of significant price moves, both up and down. Based on this track record alone, I’d say this company is worth keeping an eye on. It currently is in Phase III clinical trials for a hypotension drug. The company itself is 100% risk.
Chart courtesy of www.StockCharts.com
In a way, biotechnology stocks have now become some of the most attractive securities for stock market traders because there is no growth in the marketplace anymore, except in health care. No matter what happens to the rest of the economy, an aging population requires their pharmaceuticals, and as an industry, the incentive is there for entrepreneurs, scientists and investors to make their bets.
Source: http://www.pennystockdetectives.com
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