Biotech stocks are in the news a lot lately— that can be great for these stocks.
Biotech stock news can draw big volume and spark runs like no other sector. Especially these days.
But there’s a flip side to this volatility, which can make biotechs harder to trade.
I keep a biotech stock watchlist to track high-volume stocks with breakout charts that I think have potential. Many have a history of running. Some were the best biotech stocks of 2020.
Before I go on, note that this list of biotech stocks is NOT a recommendation to buy. I’m sharing this so you can see the thinking that goes into my watchlists. Use this guide to help you learn how to spot hot opportunities for your strategy and build your own watchlists.
Always do your own research.
A lot of beginning traders see a stock with big news and a breakout chart. But when they try to trade it, they end up with losses. Why?
I think it’s because they’re trading without a plan. They don’t know how to spot pumps. And they won’t know if the company’s diluting a spike with a new share offering. And there’s so much more to know.
That’s why we’re all about trading education in the SteadyTrade Team community. I’m dedicated to helping traders think about the big picture and the details in their market approach.
And if you want to trade this sector, I want you to build your own watchlist of promising biotech stocks. But it shouldn’t surprise you if some of the stocks I’m watching are on your list, too.
Build a better watchlist every day — join me for my no-cost premarket sessions. Learn more, see the full archive, and sign up to never miss an update here.
Table of Contents
- 1 What Does a Biotech Company Do?
- 2 How Biotech Stocks Performed in 2020
- 3 6 Biotech Stocks to Watch in 2021
- 3.1 Biotech Stocks to Watch #1: Bionano Genomics Inc (NASDAQ: BNGO)
- 3.2 Biotech Stocks to Watch #2: Moderna Inc. (NASDAQ: MRNA)
- 3.3 Biotech Stocks to Watch #3: Novavax Inc. (NASDAQ: NVAX)
- 3.4 Biotech Stocks to Watch #4: OncoSec Medical Inc. (NASDAQ: ONCS)
- 3.5 Biotech Stocks to Watch #5: Oramed Pharmaceuticals Inc. (NASDAQ: ORMP)
- 3.6 Biotech Stocks to Watch #6: Sorrento Therapeutics Inc (NASDAQ: SRNE)
- 4 Find Your Stocks to Watch With StocksToTrade
- 5 Conclusion
- 6 One Platform. One System. Every Tool
What Does a Biotech Company Do?
It’s great that you want to trade them. But first, let’s answer this: What are biotech stocks?
Biotech companies are part of the healthcare sector. They develop new drugs and treatments. Top biotech stocks caught fire in 2020 because they make vaccines. But there’s so much more to biotechs.
The entire sector has benefited from the extra attention. We’ve seen stocks like Bionano Genomics Inc. (NASDAQ: BNGO) post some big gains so far in 2021.
BNGO does genetic research for cancer and rare diseases — lots of money in that.
Biotech stocks can spend years awaiting FDA approval. When a company finally gets a drug to market, it can attract a ton of attention. And biotech penny stock can turn into a 1,000% gainer overnight. But you must know how to approach these breakout stocks with a plan.
How Biotech Stocks Performed in 2020
2020 saw a ton of high-performing biotech stocks. The sector was hot. Even smaller biotech stocks rose on speculation. Twitter pumps put stocks on the radar that no one had ever heard of.
By the end of the year, the post-March growth for biotech stocks was more or less the same as the S&P 500. But take a look at the charts of these two index-tracking ETFs, and you’ll see a big difference.
SPDR S&P 500 Trust ETF (NYSEARCA: SPY) tracks the S&P 500. Take a look at how the top 500 stocks in the U.S. performed over the past year:
Now look at this biotech index stock over the same timeframe. You’ll see a big difference…
Biotech stocks suffered much less from March’s crash. There’s a reason that biotechs are called one of the most defensive stock sectors.
They recovered much more easily last March and managed to keep up with the gains the wider market made.
6 Biotech Stocks to Watch in 2021
This list features some familiar names. Some were among the top biotech stocks of 2020. Others are making names for themselves as the best biotech stocks to watch right now.
These aren’t new biotech stock plays. And no one can predict the future — especially for a sector like biotech stocks.
Just because they have intriguing charts doesn’t mean they’re the best biotech stocks to buy. Successful traders make their own watchlists and do their own due diligence.
Here’s what’s on my radar.
Biotech Stocks to Watch #1: Bionano Genomics Inc (NASDAQ: BNGO)
About a month ago, BNGO was a biotech stock under $1. Then it started to spike on news.
As soon as BNGO came up to previously unseen levels, Twitter shorts piled in. And they continued trying to find a top even as their losses piled up.
Here’s a short clip of the plan I laid out for BNGO on December 29, 2020, the start of this rally.
GME gets all the press, but to me, this was the greatest short squeeze this year! Look at this bull flag. You can see that the stock isn’t dead yet.
Biotech Stocks to Watch #2: Moderna Inc. (NASDAQ: MRNA)
MRNA made my February watchlist.
I’ll be honest — I think MRNA is a boring stock. It doesn’t move without news. But it seems like it’s going to have some news.
MRNA has been breaking out lately. That’s enough to earn it a spot on my watchlist.
It had one of the first authorized COVID-19 vaccines. And it started out as a cheaper biotech stock than some other vaccine makers. This sent the stock up 850% over the past year.
And with news continuing to break, MRNA looks headed for more spikes.
Biotech Stocks to Watch #3: Novavax Inc. (NASDAQ: NVAX)
NVAX is another biotech company stock that had a 2020 coming-out party based on news.
NVAX was a penny biotech stock before a March spike. That started a steady uptrend that lasted until August. It fell into a consolidation pattern before a beautiful late January breakout. The stock price doubled overnight.
Now it’s trading at pretty high levels. But you also have to consider its low float compared to competitors.
With more news, we could see more of the same breakouts we saw at the end of January.
Biotech Stocks to Watch #4: OncoSec Medical Inc. (NASDAQ: ONCS)
ONCS is another biotech stock that started the year under $5.
It hasn’t had the rise of some of the others on this list. Its focus is on cancer.
But it’s a former runner, with a nice gradual uptrend. All that combines to make it one of my best biotech stock watches under $10.
Biotech Stocks to Watch #5: Oramed Pharmaceuticals Inc. (NASDAQ: ORMP)
The ORMP rally started in December. It had a breakout in late January on news that it was underway with the world’s first FDA Phase 3 oral insulin trial. That’s big news for anyone with Type 2 diabetes who doesn’t like needles.
ORMP specializes in oral delivery for drugs currently delivered via injection. It’s another biotech stock under $10. But its chart looks like a bull flag — which means it probably won’t be for long.
Biotech Stocks to Watch #6: Sorrento Therapeutics Inc (NASDAQ: SRNE)
I’ll always remember May 15, 2020, when SRNE traded 500 million shares.
That day will live in infamy. I don’t know why, but that was the day that the volume in everything just went off the charts. People had already been at home for two months. Then May 15 — something changed.
Everybody lost their minds over SRNE trading HALF A BILLION shares. Now, there’s like 20 stocks a day that will do that. And we’ll have three or four that trade a billion.
But SRNE was the stock that started this high-volume chapter. I liked it so much I gave it my ‘Setup of the Month’ award.
A press release kicked off the May spike. Let me tell you something to keep in mind when dealing with small-cap biotech stocks … Don’t get too excited about their press releases. Most of the time they’re just hot air.
But this one was exciting news to everyone sitting at home, and it brought a ton of volatility into the stock. The price action was clean. There was an easy-to-trade uptrend, with higher highs and higher lows. Skilled traders cleaned up that day.
The high volume left the stock, but part of it returned for an August spike.
Now it’s spiking again. The volume might be even more impressive now because of how high the price has climbed.
Find Your Stocks to Watch With StocksToTrade
There’s a whole market’s worth of stocks to watch … and these days, a lot of them are surging!
I want you to be able to fill out your own watchlist. That means getting a good stock screener, like the one built into StocksToTrade.
StocksToTrade comes loaded with built-in scanners that you can customize. So you can refine your searches by sector … and pretty much every other parameter you can imagine! And you can keep multiple watchlists. That’s super useful when you want to hone in on a hot stock sector like biotech.
Plus, the StocksToTrade platform comes loaded with news scanners social media feeds to help you stay up on the latest right from the platform.
And if you’re looking for real-time alerts on news that can move stocks, you gotta check out the Breaking News Chat add-on feature. Two highly skilled Wall Street pros scour the news to find the items that can supercharge stock moves — and alert to members FAST. This is a game-changer for traders.
See the StocksToTrade platform for yourself — grab a 14-day trial for just $7. Dying to check out Breaking News Chat? You can check out the HOT BNC add-on with the 14-day STT trial for $17.
‘Undervalued’ biotech stocks are in the news every day. But you’re looking for ‘good’ biotech stocks, right? Those with a history of running and high volume…
This sector is filled with fly-by-night operations. And a lot of them put out news about this or that miracle cure.
But let me ask you something. If someone’s going to cure cancer, do you think they’ll be from one of the best companies in the sector or a biotech penny stock?
I’m not saying you should learn all of these stocks’ fundamentals. What I am saying is that you should know the stocks you want to trade. And the best way to do that is to have them on a watchlist before they have news.
Once you start doing this research, you’ll start seeing the biotech pumps for what they are. And you’ll start paying more attention to stocks like MRNA and NVAX. It seems likely that these two could potentially have solid news before too long.
What do you think about our biotech stock watchlist? Are any of these stocks going on your watchlist? Let me know in the comments!