The Biotech Everyone Gave Up On Is Quietly Rebuilding

Biogen’s (BIIB) biggest drugs are dying. The stock is climbing anyway.

For a company whose old engine, the big multiple sclerosis names, has been winding down for years, that does not add up on the surface.

So what is the market starting to see that the headlines are not?

Look at what Biogen has actually been shipping.

The FDA just handed its experimental spinal muscular atrophy drug, salanersen, a Breakthrough Therapy Designation.

The pitch on that one is a once-a-year dose with the potential for high efficacy, which in a disease like SMA is a big deal.

Around the same time, the company put up positive late-stage data on a lupus drug with steroid-sparing potential.

It also closed an acquisition of Apellis that pushes it into a whole new kidney-disease franchise. That is not a company sitting still. That is a company rebuilding its engine part by part.

Now, I am not going to pretend this is a sure thing, because with a pipeline biotech it never is.

Last month one of its other trials, a study called CELIA, flat out failed, and the stock dropped more than 6% in a day. That is the deal with these names. For every breakthrough there is a trial that misses, and the misses hurt.

The turn is starting, but it is not finished, and the old MS business is still shrinking underneath it.

However, the chart is speaking to me. And while it’s important to know where a business stands and what catalysts could move the price, it’s the chart that drives my decision-making.

Because I’m looking at these through the lens of a trader, more so than an investor.

Start with the daily exponential moving averages. The 8 is over the 21, the 21 is over the 34, and the price is sitting on top of all three. That order matters.

It means every timeframe of the buyer is lined up in the same direction, the short-term, the intermediate, and the longer swing, all in agreement.

Nobody who bought recently is trapped underwater, fighting to get out. That stack is the difference between a real trend and a stock just bouncing around, and it is the first thing I want to see before I will give a name a second look.

Biogen has it, clean.

But the stack alone is not what gets me. It is what is happening underneath it.

The squeeze is on.

For anybody newer, a squeeze is what you get when a stock goes quiet, when the volatility winds down, and the range tightens up until the chart is basically coiling in on itself.

Think of it like a spring getting wound tighter and tighter. The longer it winds, the more energy it stores, and that energy has to go somewhere.

When a squeeze finally releases, it tends to do so hard and fast, and it usually points in the direction the trend was already pointing.

So when you put it together, you’ve got a strong trend, bullish pattern, and squeeze.

Your Action Plan

Market volatility has picked up after Friday’s sell-off. Despite the large swings in the Nasdaq, we are seeing greater weakness in some sectors than others.

Investors have been fleeing out of semiconductors and jumping into biotech. Even yesterday, when we had heavy selling pressure in tech, names like BIIB were trading higher.

That’s what we call relative strength. And it matters in a market where everything doesn’t go up.

I’ll be live in the Daily Profits Live room, calling out plays and taking shots if I see opportunities.

If you want to be in on the action, check us out here.