Thursday, March 19, 2009

Impact On Biotech Stocks

It is important to note that the price for any given stock is the culmination of all market participants weighing in on all the data that is currently known, and what they believe will occur in the future. The markets are constantly in flux as they "price in" any changes to this data as quickly as possible. Usually, the larger the move, the more surprised market participants are by the data.

Each stocks experience a move that is correlated to a news event, and while the catalyst is not always apparent, the reaction is usually quite clear. Regardless of the event, it is always important to pay attention to the reaction, as this is what moves price.Check opinions at the door and follow the price action. The charts always show the reaction and allow traders to see what is occurring objectively.