biotech stocks BioMarin (BMRN) crossed the buy point and is currently trading at buy zone.
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On Wednesday, shares of BioMarin jumped more than 7% on high volume and traded above Buy point 92.86. When a stock makes a gap above a buy point, the buy zone starts from the first five-minute high on the day of the gap.
Since August, biotech stocks have built a double bottom. Before the breakout, the stock was up on higher volume, a good sign.
The stock’s relative strength line has also been roughly vertical over the past few weeks. The stock is trading well above its price. 50 day moving average and its 200-day line, based on MarketSmith.
BioMarin exploded when it was reported that the FDA said it would not hold an advisory committee meeting to discuss the proposed hemophilia A gene therapy. These advisory committees gather to discuss the benefits and risks of experimental drugs and make recommendations that are not binding on the FDA. Once that step is removed, the review process will continue.
Biotech stocks accelerate
The California-based company reported a strong acceleration in annual earnings and sales growth in its most recent quarter. Earnings rose from 18 cents a share in the same quarter a year ago to 45 cents a share in the recent September quarter. That’s 150% growth.
Q3 revenue grew 24% to $505.3 million. In the previous quarter, earnings and sales grew 9% and 6%, respectively. Fast growth is the top quality investors want to see in stocks to buy and watch.
While full-year earnings are expected to fall 49% in 2022, analysts expect EPS to soar to 210% in 2023.
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