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Amex Biotechnology Index - Strong Medicine    


 BTK




Wednesday, February 3, 2010

By Jay Pasch

The Amex Biotech Index (BTK2) reversed last week's languid performance by setting a 52-week high on Tuesday, shooting up 25.69-points for a Very Big gain of 2.6%, ending the day with a close over the 1,000 round at 1002.27. What's next for this drug Kingpin? Given yesterday's strong performance, history favors the bulls, according to past occurrences of this sort of move.

Q: What is the historical performance for the Amex Biotechnology Index after the index closes up Very Big on a day which crosses to a 52-week high?

A: According to the 11 previous occurrences of this event, EventEdge indicates that BTK has shown a strong bullish edge that peaks 10 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 2 February 2010) is Tuesday, 16 February 2010. BTK rallies in 100% of the cases (11 of 11) by an average of 6.2% relative to the close on the event date. The overall return of the 11 cases is 6.2%, which, based on the close of BTK on the event date (1002.27), provides a target price of 1064.41.

Consider using our EventEdge3 product to review this study, as well as to search for other trading ideas using the BTK Index's current components: AFFX4, ALXN5, AMGN6, AMLN7, BIIB8, CELG9, CEPH10, CRA11, GENZ12, GILD13, HGSI>, ILMN1514, ITMN16, LIFE17, MIL18, MYGN19, NKTR20, OSIP21, SQNM22, VRTX23.

Mr. Jay Pasch24 is a private futures and equities trader based in Minnesota. He may hold positions in the instruments mentioned in his trading ideas.




 
Let variable values:
@	=	BTK
theEvent	=	IF
   1 value percent_move of @  is more than
   (30 day average of 1 value percent_move of @   +
    (2 * 30 day std_dev of 1 value percent_move of @
    )
   )
AND
  high of @ crosses above 52 week highest of high of @  1 value ago
THEN 1
ENDIF


      Date   Day            t+7            t+8           t+10           t+11           t+16

12/21/1995   Thu           10.5            8.0            9.1            5.2            4.9
12/31/1998   Thu            0.3            2.3            5.1            3.3            1.8
12/02/1999   Thu            0.7            0.7            2.9            2.8           26.6
12/21/1999   Tue           17.2           18.5            9.1           11.7           25.6
01/07/2000   Fri           11.6           16.0           13.9           13.3            9.4
02/16/2000   Wed            9.3           15.7           17.7           25.2           13.6
05/27/2003   Tue            7.5            5.8            2.3            5.5            1.9
01/16/2004   Fri           -1.1            1.2            1.2            1.7            2.4
07/20/2005   Wed           -2.2           -1.1            0.3           -2.1           -2.7
04/12/2007   Thu            4.3            4.1            4.5            4.2            3.4
07/31/2008   Thu            0.6            1.0            2.6            2.2           -1.4
02/02/2010   Tue            NaN            NaN            NaN            NaN            NaN

             Avg            5.3            6.6            6.2            6.7            7.8
          AvgPos            6.9            7.3            6.2            7.5           10.0
          AvgNeg           -1.7           -1.1            NaN           -2.1           -2.0
          PctPos           81.8           90.9          100.0           90.9           81.8
          PctNeg           18.2            9.1            0.0            9.1           18.2
         Maximum           17.2           18.5           17.7           25.2           26.6
         Minimum           -2.2           -1.1            0.3           -2.1           -2.7
          StdDev            6.3            7.0            5.6            7.5           10.2
           ZStat            0.8            0.9            1.1            0.9            0.8
        Variance           39.7           49.4           31.1           56.9          103.1


12 Occurrences
 

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Web Address of this trading idea:

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Links:

1 http://www.lim.com
2 http://quote.morningstar.com/stock/s.aspx?t=BTK
3 http://www.markethistory.com/content/events/indexes/chart.html?ticker=BTK&events=UpXL0,High52WeekCross0
4 http://www.markethistory.com/content/events/indexes/chart.html?ticker=AFFX
5 http://www.markethistory.com/content/events/indexes/chart.html?ticker=ALXN
6 http://www.markethistory.com/content/events/indexes/chart.html?ticker=AMGN
7 http://www.markethistory.com/content/events/indexes/chart.html?ticker=AMLN
8 http://www.markethistory.com/content/events/indexes/chart.html?ticker=BIIB
9 http://www.markethistory.com/content/events/indexes/chart.html?ticker=CELG
10 http://www.markethistory.com/content/events/indexes/chart.html?ticker=CEPH
11 http://www.markethistory.com/content/events/indexes/chart.html?ticker=CRA
12 http://www.markethistory.com/content/events/indexes/chart.html?ticker=GENZ
13 http://www.markethistory.com/content/events/indexes/chart.html?ticker=GILD
14 http://www.markethistory.com/content/events/indexes/chart.html?ticker=HGSI
15 http://www.markethistory.com/content/events/indexes/chart.html?ticker=ILMN
16 http://www.markethistory.com/content/events/indexes/chart.html?ticker=ITMN
17 http://www.markethistory.com/content/events/indexes/chart.html?ticker=LIFE
18 http://www.markethistory.com/content/events/indexes/chart.html?ticker=MIL
19 http://www.markethistory.com/content/events/indexes/chart.html?ticker=MYGN
20 http://www.markethistory.com/content/events/indexes/chart.html?ticker=NKTR
21 http://www.markethistory.com/content/events/indexes/chart.html?ticker=OSIP
22 http://www.markethistory.com/content/events/indexes/chart.html?ticker=SQNM
23 http://www.markethistory.com/content/events/indexes/chart.html?ticker=VRTX
24 http://www.markethistory.com/staff/detail.html?s=pasch