Earnings Alert: This Biotech Is Unstoppable
It’s been a wild year for stocks so far.
Between the trade war affecting the tech sector (among other headwinds) and pot’s crushing bear market, we’ve had little time to touch on another sector I love to trade…
But with earnings season in full swing and a number of big names reporting it’s time to turn our attention back to a sector I have loved for years.
Biotech stocks are ripping higher this week after bottoming out through the late-summer and early-fall months.
Looking at the iShares Nasdaq Biotechnology ETF (IBB) we can see this bounce-back action plain as day.
Strong earnings from some big names are helping spark the breakout.
But before I share one of my favorite ways to play this potential breakout I need to show you how we got here.
Biotechs Faced a Ton of Headwinds This Year
The biotech sector is one of the more volatile sectors in general. And this year that volatility peaked.
Between political fallout from the opioid epidemic and Trump’s scrutiny on drug pricing, along with scandals like Johnson & Johnson’s asbestos-laced baby powder, it’s no wonder biotech as a sector has struggled to gain ground in 2019.
But not all biotechs are down this year. And some are even breaking out this week.
This includes one biotech that’s up 44% since we first suggested taking a crack at it back in May of last year.
And considering its recent earnings beat more gains could be ahead.
We’re up 44% on MRK (and Why More Gains Could Be Ahead)
When I first suggested grabbing shares of Merck & Co. (NYSE: MRK) it was the success of their marquee cancer drug, Keytruda, that we were banking on.
At the time Keytruda was going through the final rigors of the FDA approval gauntlet.
I pored over the data and financials for weeks. By the end of my research I was confident MRK shares, thanks to Keytruda and a few other innovative drugs in their pipeline, were poised for some big gains in the coming months (and years).
And greater market sell-offs aside, like the ones we saw this summer and in late December 2018… any Tech Profits follower who acted on our advice last May could be up as high as 45%.
Moving forward I believe MRK shares could have a lot more upside.
With Stocks…. Strength Begets More Strength
Tuesday morning MRK reported earnings. Long story short, they crushed consensus estimates in a strong Q3 earnings beat. Here are the numbers at a glance:
MRK reported Q3 earnings of $1.51 per share, beating the consensus estimate of $1.24.
Quarterly sales came in at $12.4 billion, which also beat the analyst estimates of $11.63 billion. Additionally, MRK has issued guidance for EPS and sales above consensus estimates.
And resident chart expert Greg Guenthner notes that MRK shares are bouncing between the $80–87 range right now.
But if MRK can close at or above $87 this week, we could see another breakout soon.
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Chief Technology Expert, Technology Profits Daily