Medivation (MDVN) is part of a white hot biotech group that has been leading the markets to all time highs. We have seen “first tier” names such as Gilead, Celgene, Regeneron, Biogen-Idec and Amgen showing great leadership, which brings others along with it (“A rising tide lifts all boats!”).
Medivation is a biopharmaceutical company specializing in novel therapies to treat diseases in the US. They have focused on drugs to help cure cancer, and most recently, a prostate cancer drug has shown great promise. They are always the subject of takeover speculation, as their pipeline of promising drug therapies is solid.
Medivation is considered a “second tier” name, but make no mistake, this stock can be explosive. From its October 2014 lows, this stock is up a solid 39%, and while the correction in January hit this name, the tight wedge (see the chart below) has broken to the upside.
The chart is a thing of beauty, reaching new relative highs lately. The stock exhibits exemplary relative strength amid some very strong volume. We like to see a stock break out of a base on higher turnover, as this is indicative of institutional interest. While this level may look like a potential top, we still have not seen that blowoff-type volume that tells us the move could be over.
If the biotech group continues to power forward, we could see Medivation move to even higher ground. Take a look at the chart above and the video below to see how we are evaluating the current position. Because we liked it so much in the Explosive Options Service, we bought the April $125 calls on Monday March 2.
Medivation Chart Analysis
Take a deeper dive into the chart action and learn how to read the technicals as I walk you through the Medivation stock (NASDAQ: MDVN) and my analysis.
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