How do we look for tomorrow’s winners before they become today’s headlines—and why these three names in biotech have our attention now.
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One of the questions I get more than any other is: “Jonathan, how do you know these stocks are going to explode when you find them?”
The honest answer is I don’t.
No one knows ahead of time that a stock is about to double. If someone told you they do, I’d be skeptical. What is with you He can What you need to do is learn to recognize when something is worth a closer look. That’s really what I’ve spent most of my career doing.
A few weeks ago, one of the companies we were following on my page Masters in Trading Live displays – Unicure Nevada (Q) — nearly doubled after the US Food and Drug Administration announced it had changed its position on one of the company’s drug candidates. Overnight, everyone wanted to talk about it.
What interested me wasn’t the move itself. This was what happened before This step.
For about a week leading up to this announcement, I continued to see unusually large amounts of trading in the stock. Not random trades here and there, but the same type of big money institutional activity showing up over and over again.
This does not mean that someone knew what the FDA was going to do. Markets are rarely that simple. But he told me it was worth investigating.
After nearly 30 years of trading futures and options on the floors of Chicago, I’ve learned that big institutional investors don’t spend millions of dollars casually. As they continue to build positions in the same company, I want to understand what they see and what the rest of the market doesn’t see yet.
Sometimes you do all that homework and discover there’s nothing there.
Sometimes you find a stock that’s about to become the biggest story of the week.
This got me thinking that this would be a good opportunity to pull back the curtain a little and show how I look at biotechnology.
It’s one of my favorite areas of the market because it follows a completely different set of rules than most businesses follow on a daily basis.
Today I’d like to explain what I mean by that, introduce you to three biotech companies currently on my watchlist, and show you why I believe paying attention to corporate behavior can often tell you more than just reading the headlines.
Biotechnology lives according to its own calendar
One of the reasons I enjoy biotech so much is that it doesn’t really care about the same things that the rest of the market does.
Let’s say that within a week, the Fed surprises everyone, inflation comes in hot, and payroll numbers fall short of expectations. The stock market as a whole may decline, however Biotechnology stocks You will barely move.
Then the FDA decision comes out on Tuesday morning, and one biotech stock suddenly rises 60% before you’ve even finished your second cup of coffee. That’s just the nature of the business.
These companies trade on catalysts such as clinical trial results, FDA decisions, and advisory committee meetings. Those are the dates that matter.
That’s why I spend a lot of time studying organizational calendars and upcoming events. They tell me when I should start paying close attention.
The company I mentioned earlier, uniQure, is a perfect example. For months, investors believed a treatment for Huntington’s disease faced a tough road after regulators questioned whether existing data would be sufficient.
The FDA then changed its thinking after markets closed on Tuesday, June 16. Suddenly, the company that everyone ignored became one of the biggest winners in the market.
UniQure closed Tuesday at $26.99. Then on Wednesday, June 17, it opened at $43, touched $48.88 during the day, and closed at approximately $48. That’s a gain of 81%, overnight.
Most investors focused on the FDA announcement.
I found myself thinking much more about everything that had happened before that.
Clues usually appear first
When I returned to the trade, what stood out was how many clues were there beforehand.
Institutional investors have been building upside exposure through the trading market. Everything I’ve seen in trading tells me that sophisticated investors lean toward the upside, and don’t prepare for the downside. This didn’t guarantee anything, but it certainly caught my attention.
This is the real difference between investing and simply guessing.
I’m not trying to predict what the FDA will do. I’m trying to understand where sophisticated investors are placing meaningful bets before the broader market spreads.
Sometimes these smart players are wrong. This is part of the job.
But when an important catalyst approaches, unusual institutional activity begins to emerge, and the trading market begins to tell the same story, I’ve learned that it’s usually worth digging deeper.
The goal here is to build habits that help you recognize tomorrow’s opportunity before everyone starts talking about it.
Three biotech companies I’m monitoring
Whenever a deal like this works out, the next question is always the same: “So, what do you think of now?”
The truth is, I’m never looking for anything “else.” Every company, every trade, has its own story.
But there are three biotech names I spent a lot of time researching because I think they deserve a closer look.
The first is Ionis Pharmaceuticals Company (ions)What I like here is the calendar. Ionis has several potential catalysts over the coming months, which means investors aren’t counting on one decisive event. Just as importantly, I don’t think any trades have become too expensive yet, which gives us more flexibility in how we approach the stock.
I’m watching too Silkweety Company (Save). This caught my attention because the stock was sold off despite encouraging clinical results. When I see a disconnect like this, I start to wonder why. What is even more interesting is that many well-respected health care funds have not headed for the exits. They have stayed with the company. When experienced institutional investors remain patient after disappointing price action, I think it’s worth paying attention to.
The third name is RepliMoney Group (Reply). This is easily the riskiest company of the three, and I’ll treat it that way. But biotechnology has never been about certainty. It’s about probabilities. Replimune has meaningful catalysts ahead, and is another company where I see enough pieces coming together to justify keeping it on my whiteboard.
Now, let me be clear about something. I’m not telling you that these three companies are guaranteed winners. That’s not how biotech works, and it’s not how I trade.
I look for situations where science, evaluation, and institutional behavior begin to point in the same direction. When that starts happening, I think it’s worth bending over and doing the work.
That’s why we built Convergence
One of the reasons I enjoyed working with him Mark Chaikin Over the past year we have been approaching the market from two very different directions.
For most of my career, I have focused on unusual business activity. I want to know where something unusual is happening before everyone notices it. Mark has spent decades studying institutional money flow – where big money actually goes.
When we started comparing notes, we realized something interesting. We would often select the same stocks, but for completely different reasons. This eventually became the basis for our new one Convergence system.
Before we introduced it publicly, we tested this approach across nearly 200 historical deals. The combined signal produced a win rate of 81%, an average win rate of about 147%, and helped us avoid nearly two out of every three losing trades.
However, backtests are one thing. What really matters is how the system performs in the real world.
Over the past month, readers have already reported gains of 243%, 505%, 745%, 920%, and even over 2,000% using the same approach on Butterfly Network Company (Pfly) Trade on one of my premium trading services. Of course, not every trade works this way, and no strategy wins every time. But the early results have strengthened my confidence that Mark and I are headed toward something worthwhile.
That’s also why I wanted to write this letter… to show you how I think.
The biggest opportunities rarely come with TV cameras and front-page headlines. More often than not, these initiatives start quietly, with institutional money starting to move in before they hit the headlines and TV cameras.
This is a habit I’ve been trying to build over the past three decades. It’s also the habit that Mark and I try to help our readers develop Convergence.
If you want to see exactly how we implement this process today – not just in biotech, but across AI infrastructure, space, energy and many other topics we’re seeing – I think you’ll enjoy Free presentation Mark and I recently recorded together.
I think you’ll look at the market a little differently.
Remember, the creative trader wins,
Jonathan Rose
founder, Master of Commerce
note: One of the things I appreciate most about Jonathan’s work is that he never starts out saying, “This is the stock to buy.” “That’s what I see, and that’s why I think it’s important,” he begins. This is a more beneficial way to learn. If you’d like to see how Wall Street veterans Jonathan and Mark Chaikin apply the same approach across biotech, AI, SpaceX, and many other market topics, I encourage you to take some time to watch their work. Free presentation.
