Large players volume has exploded higher in the Daily Pharmaceutical and Medical Bull 3X Shares fund PILL. I think this has bullish implications for biotech stocks.
Th popular wisdom is that after President Trump’s State of the Union speech last week where he said that he would be working to bring down drug prices, pharmaceutical stocks and by extension biotech stocks are bad places to invest.
What is happening on the chart of the Daily Pharmaceutical and Medical Bull 3X Shares fund PILL proves that this popular wisdom is likely wrong.
Notice the huge explosion higher in large players volume. This means that on the tick chart in the 1 minute time frame, huge buy orders have been detected. This suggests that large players are buying the dip. The negative Twiggs Money Flow suggests that there may be time to go long PILL. I’m not going to add PILL has a buy candidate because I think it’s just too short term. The idea of going long PILL is more of a scalp trade strategy where you attempt to capitalize on a very short term ‘V’ bottom bounce and then you get out quickly.
Nevertheless, large players executing a buy the dip strategy in PILL is not something you would expect to see if pharmaceutical and medical stocks were going into a medium-term downtrend.
We will have to wait and see what institutional traders do on Monday and Tuesday of next week but price action on PILL suggests that for many traders, Buy the Dip is still in-play for pharmaceutical and medical stocks.