Emergent BioSolutions Inc – Time For Reversal
Emergent BioSolutions Inc. (EBS) is a multinational biopharmaceutical company focused on the development, manufacture and commercialization of immunobiotics, consisting of vaccines and therapeutics that assist the body’s immune system to prevent or treat disease. It manufactures and market BioThrax, also referred to as anthrax vaccine adsorbed. It develops immunobiotics for use against infectious diseases that have resulted in significant unmet or underserved public health needs and against biological agents that are potential weapons of bioterrorism and biowarfare.
After looking at EBS chart, we can see that the stock has run up quiet alot and its time for some consolidation. This also means there is money to be made on the short side. Once it broke the 18$ mark, I took a short position, shorting at 17.99$. The day ended with EBS at 17.46$ providing me a healthy gain in one day. I intend to cover around lower 17s.
Reasons for shorting
- Stock run up (up 40% in last 3 months)
- RSI and MFI points to overbought levels
- Accumulation was rising, but now flattening out
- Heavy down volumes suggesting selling pressure/profit taking
Risks at hand
- Biotech stocks are not always predictable shorts (any drug news can cause sudden spike)
- Featured in Investor’s Business Daily (IBD) (stock pumping)
Make charts your good friend and you will end up on the winning side more than often.