Trend Signal Now: Here come the Biotech stocks!

Saturday, November 23, 2024

Editor's Note: Click here to download the Hot Corner Insider Baker Bros FREE Special Report.

Small-caps are hitting new all-time highs, joining all those Large-cap and Mid-cap Indexes that have already being doing that for most of the year.

Here is the S&P600 Small-cap Index, officially completing this multi-year base and now beginning its new leg higher:

And so when I think "Small-caps", I think about a ton of Regional Bank stocks and even more Biotechnology stocks.

Together they make up a quarter of the entire Small-cap universe.

Regional Banks already went out at new multi-year highs this week.

And I believe with all this small-cap strength, Biotechs are next.

Here's what that relationship looks like:

But which Biotechs do we own? There are so many of them!

Well, over the years, we've developed a number of tricks to help us identify which ones we may want to buy. One of those tricks is following insider activity, especially in an industry group like Biotechnology, where we know for a fact that we do NOT have any edge over the scientists who actually understand this stuff.

Also, not all insider activity is useful. Actually, most of it is garbage. That's why we created The Hot Corner—to show people the filings that actually matter.

In our years of following these filings, one insider has stood out among the rest: The Baker Bros.

The Baker Bros. are a hedge fund known for their razor-sharp focus and high-conviction bets on life sciences.

Most notably, these guys turned a $16 million stake in Seagen $SGEN into a $10 billion windfall when Pfizer bought them out in 2023.

It was one of the biggest single-trade returns in hedge fund history.

When The Baker Bros. make a move, we pay attention.

That's why the team at The Hot Corner Insider just put out their latest Special Report tracking their trades.

Even though some damage has been done to biotech these past few weeks, our study of market history tells us that a reversal is coming. And when it does, the stocks in this report will be on our shopping list.

Click here to download this FREE report on The Baker Bros.

- JC

JC Parets, CMT | Founder, All Star Charts

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