Charts: Contrarian Paydays and a Critical Biotech Test

You're receiving this email as part of your subscription to Lou Basenese’s Trend Trader Daily [Unsubscribe](. [Trend Trader Daily] Charts: Contrarian Paydays and a Critical Biotech Test Friday, May 27, 2022 It’s Friday in the Trend Trader Daily Nation... That means it’s time to add some excitement to our usual word-based investment analyses by ushering in a handful of charts. If nothing else, charts make it a whole lot faster to digest new information, make some investments — and then get on with the weekend! And in this case, it’s a longer, holiday weekend. With that mind, let me first say a heartfelt “thank you” to all the brave men and women who fought to preserve our country and our freedoms. Your service and sacrifice are never forgotten here. Now, let’s move onto today’s content featuring: - Proof being a contrarian pays, even in the most extreme markets and assets. - A key support level before a sustained biotech rebound can begin in earnest. > ADVERTISEMENT < Former Goldman Sachs PhD: "Never returning to normal" PhD Economist: "Don't Bet on It" According to former Goldman Sachs executive Nomi Prins... Americans who are hoping for a 'return to normal' are going to be shocked when they see what happens next in America. She says, "If you're betting your job, savings, or retirement accounts on a return to 'normal' you're about to be left behind by a brand-new crisis few see coming." [Click here now to see America's next crisis.]( From Rubble to Rebound Back in March, in the wake of Russia’s invasion of Ukraine and the almost overnight collapse of the Russian ruble, I made a bold prediction. Specifically, “if you’re a speculator, picking up a few rubles right now could ultimately reward you.” And I wasn’t wrong! As you can see in the chart below, the currency has rebounded an astonishing 30% to top 57 rubles to the dollar. That’s a level not seen since March 2018 and makes the ruble the best-performing currency this year. (click image to enlarge) I agree with Sberbank CIB’s assessment, "We think the local currency may have trouble prolonging its recent rally, as selling activity among exporters may begin to decline." So go ahead and lock-in gains here if you followed my contrarian advice. For everyone else, let this be a reminder that contrarianism pays. And a lesson to consider the next crazy contrarian call I make. It might be emotionally difficult to follow, but financially it could really pay off. Biotech Bounce? I’ve chronicled the completely irrational and overdone sell-off in biotech stocks over the last year to the point many of you might start to think I’m in denial about a change in fundamentals warranting the move. But I assure you I’m not in denial. Nor am I alone in my assessment. Consider… Countless pharmaceutical companies agree, as [nearly a dozen]( started to take advantage of the sell-offs to make acquisitions, including Regeneron Pharmaceuticals’ (REGN) purchase of Checkmate Pharmaceuticals, Inc. (CMPI) at a 335% premium. As do countless institutional investors, which have successfully and are continuing to raise new funds to scoop up compelling biotechs at depressed valuations. Per Bloomberg, this includes the well known Perceptive Advisors, “which has gotten crushed in the biotech bloodbath.” The firm insists valuations are now at levels “we do not believe are rational or sustainable.” They’re not wrong, as the price-to-book ratio for the SPDR S&P Biotech ETF (XBI) now rests at 3.3 versus a 10-year average of 7.0. And they’re following up this conviction with action, raising funds because they believe “now is the time to be prepared to go on the offensive.” In short, I agree all the fundamentals are in place for a rebound. We’re just waiting on prices to firm up. More specifically, investors are keenly watching the trading in the XBI. As you can see, we’ve successfully tested the pre-pandemic and 2018 lows with the XBI dropping to an intraday price of 61.78 on May 12. (click image to enlarge) Since then, the ETF has rallied off the bottom as much as 15%, which isn’t immediately obvious in the chart. If the gains hold, we could see a flood of money come back into biotech in a hurry, which will serve to put in a definitive bottom and begin the next biotech boom in earnest. So keep an eye on the trading here.   FOR TREND TRADER PRO READERS ONLY > [LEARN MORE]( < Ahead of the tape, Lou Basenese Founder & Chief Investment Strategist   Copyright © Trend Trader Daily, All rights reserved. You signed up on []( Our mailing address is: Trend Trader Daily 301 S. Perimeter Park Dr. Suite 100 Nashville, Tennessee 37211 [Update Subscription Preferences]( | [Unsubscribe from this list]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. SECURITY HOLDING NOTICE: Although we are never compensated from any companies for coverage, you should be aware that Trend Trader Daily, its authors, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication. While authors might actively transact in the securities mentioned, they will always have a net position that is consistent with the position set forth in our research reports, letters and updates. DISCLAIMERS: The work included in this communication is based on diverse sources including SEC filings, current events, interviews, corporate press releases, and information published on funding platforms, but the views we express and the conclusions we reach are our own. As such, this content may contain errors, and any investments described in this content should be made only after reviewing the filings and/or financial statements of the company, and only after consulting with your investment advisor. Actual results may differ significantly from the results described herein. Furthermore, nothing published by Trend Trader Daily, Inc should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Trend Trader Daily is an independent provider of education, information and research on publicly traded companies, and as such, it accepts no direct or indirect compensation from any companies or third parties mentioned in any of our letters, reports or updates.