Yesterday, I posted a write up about the the word catalyst as it relates to the Biotech Sector.
Today, although a day or so late, we have another “Catalyst” to Discuss.
In my opinion, anyone long this thing into the “Catalyst” deserved what they got. Why? Look at the chart. There was a H&S top, that actually started to break down, before the scandal hit.
Sometimes these things happen and they are out of our control. We have to write it off as a cost of doing business. That is what risk management and position sizing is for. This was not one of those times. It really amazes me, how many smart intelligent investors ignore technicals.
Once again, the news story was merely a catalyst to trigger the pattern and send it lower. As they always say, it’s not the news, its the reaction to the news.
The technical target for this thing is 19. Usually enough people try to think they are smart and catch the knife, so we might bounce a bit. Keep an eye for continued short entry into 19 bucks.