How Low Can Biotech Go?

The stock market followed through to the downside, early Wednesday, raising the hopes of those on the short side. The turnaround caught many by surprise as the somewhat-optimistic economic outlook from Fed Chair Janet Yellen helped boost the market.

It still was a mixed close as the Nasdaq Composite (COMP) was down 0.32% while the Spyder Trust (SPY) that tracks the S&P 500, gained 0.59%. The Internet stocks continued to get hit hard, but in the broad market, there were twice as many advancing stocks as there were declining ones.

It has been a rough couple of months for the stock market as the wide trading range and sharp swings up and down have made it tough for both traders and investors. The earnings season has made it even worse as it has accentuated the volatility. There have been a number of stocks that beat earnings estimates but were still hit by selling.

Biotechnology has been one of the casualties as the Dow Jones Biotechnology Index (DJUSBT) was down over 20% at the mid-April lows. The question now is whether the sector has made its lows or if the biotech stocks are vulnerable to another wave of selling?
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Weight Watchers International, Inc. (NYSE: WTW)

Weight Watchers International, Inc. provides weight management services in North America, the United Kingdom, Continental Europe, Australia, New Zealand, and internationally. The company operates through North America, United Kingdom, Continental Europe, and Rest of World. It offers a range of products and services comprising nutritional, exercise, and behavioral tools and approaches. The company also provides various products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, PointsPlus calculators, and fitness kits, as well as ActiveLink, an activity monitor and Web experience that tracks activity throughout the day. In addition, it offers Internet subscription products, such as Weight Watchers Online that offers online and mobile content, functionality, resources, and interactive Web-based weight management plans; and Weight Watchers eTools, an Internet weight management product, which allows users to manage the day-to-day aspects of weight management plans online or via their mobile devices, discover different food options, and keep track of their weight management efforts.
To review Weight Watcher’s stock, please take a look at the 1-year chart of WTW (Weight Watchers International, Inc.) below with my added notations:

WTW has been in a persistent downtrend since August of last year. During that time the stock has also formed an important trend line of resistance (blue). Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, WTW obviously has a very important trendline of resistance that currently sits near $25.

The Tale of the Tape: WTW is currently stuck under a down trending resistance. A break above resistance should mean higher prices, thus a long trade could be made. Short traders might look to enter a trade at the resistance.
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Almost Half The Russell 2000 Members Are In A Bear Market

With market internals dismally weak and 967 of the Russell 2000 index’s members down over 20% from their highs (a bear market), the question is: how long can they maintain the status quo thanks to a handful of big blue chips as levered longs attempt to stay solvent?
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Rosetta Resources Inc. (NASDAQ: ROSE)

Rosetta Resources Inc., an independent exploration and production company, engages in the acquisition, exploration, development, and production of onshore oil and gas resources in the United States. It owns producing and non-producing oil and gas properties located primarily in South Texas, including the Eagle Ford, and in the Southern Alberta Basin in Northwest Montana. As of December 31, 2011, the company had an estimated 965 billion cubic feet equivalent of proved reserves, including 36,370 million barrels of oil, 50,219 million barrels of natural gas liquids, and 446 billion cubic feet of natural gas, as well as drilled 53 net wells. Rosetta Resources Inc. was incorporated in 2005 and is headquartered in Houston, Texas.
To analyze Rosetta’s stock for potential trading opportunities, please take a look at the 1-year chart of ROSE (Rosetta Resources, Inc.) below with my added notations:

After running up nicely last fall, ROSE fell pretty hard into this year. Here recently the stock has been stalling at the key level of $50 (blue). You will notice that the $50 level has always been an issue for ROSE whenever the stock has been under it. That level was also a brief support in December.

The Tale of the Tape: ROSE has a key level of resistance at $50. A short trade could be made on any rallies up to that $50 area with a stop placed above that level. A break back above $50 would negate the forecast for a lower move.
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London GOLD VAULTS EMPTY: Price Spike Ahead

IN THIS INTERVIEW:
- Physically deliverable gold futures contracts are coming Asian markets* ►1:10
- Manipulation: gold & silver price fluctuation limits will be implemented* ►6:30
- London gold vaults are empty, gold price spike ahead ►8:31
- Silver price will follow gold higher. At $19/oz, silver is a "bargain" ►16:55
- Federal Reserve "taper" and Friday's job numbers* are lies ►23:10
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Chart of the Day - Advantage Oil and Gas (AAV)

The Chart of the Day is Advantage Oil & Gas (AAV).  I found the stock by sorting the 52 week high list to see which stocks are still having momentum and this stock was right near the top of the list. Since the Trend Spotter signaled a buy on 3/18 the stock gained 50.12%.

AAV is an intermediate oil and natural gas corporation, engaged in the exploration and development of oil and natural gas properties in Alberta and Saskatchewan in Canada. It focuses on developing the Montney natural gas resource play located at Glacier, Alberta. The Company's properties are located in Alberta and Saskatchewan, and consist of liquids rich natural gas and light oil.

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Massive Buyback Could Trigger a 45% Gain in Assured Guaranty (NYSE: AGO)

As the U.S. economy spiraled downward in 2008 and 2009, concerns arose that many state and local governments would default on their bonds. And if that happened, such a wave of municipal bankruptcies could have wiped out Assured Guaranty (NYSE: AGO), which provides insurance against such defaults.
Thankfully, we only saw a few select defaults in places such as Harrisburg, Penn., Stockton, Calif., and Jefferson County, Ala. Still, this bond insurer wasn't fully unscathed, as it has paid out $6 billion in claims since the start of the global financial crisis.
Yet, in the past 18 months, the default risk appears to have receded as most state and local governments have shored up their balance sheets. In response, investors in Assured Guaranty have been able to focus on the solid fundamentals underpinning the municipal bond insurance market.   (more)

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