Repligen: A Promising Biotech Play

| About: Repligen Corporation (RGEN)

Repligen Corporation (NASDAQ:RGEN) is a biopharmaceutical company which engages in the development and commercialization of therapies that deliver value to patients and clinicians in neurology, gastroenterology, and orphan diseases. Over the past week of this market uncertainty, RGEN has continued to create new 52-week highs as biotech stocks can many times move to the beat of their own drum.

RGEN has two important clinical trial catalysts in the current quarter and the optimism is likely part of the reason for the bullish momentum we have seen recently. Investors are looking forward to 1st quarter results for Phase 3 RG1068, Pancreatic Imaging, and Phase 2b RG2417 for bipolar depression. If positive results are released, we may see significant momentum creating interesting trading opportunities. Along with the trial news, we can expect RGEN to form strategic partnerships for the top drugs in it's pipeline sometime in the near future. With plenty of cash at $56 million and zero debt on the balance sheet, RGEN looks even more enticing which is confirmed by the bullish chart setup.

(Click to enlarge

Yahoo Finance has the next earnings announcement taking place on February 8. The chart looks ready for a healthy pullback that doesn't breach support levels around $4.80, preferably never breaching $4.96. Volume has significantly increased as of late and with a shorts holding about a three-day cover at current average volume, we have likely started catching a few hands covering early. Since I do not make a habit to hold into earnings, as the "edge" is significantly reduced and risk is increased, I will look to add to my position on a low volume pullback but, will have a reduced position or no position going into earnings.

Unfortunately, the catalysts may be announced during earnings and that is an unnecessary risk for me, especially with the current profits I need to protect. Many stocks have been susceptible to a sell-the-news reaction to earnings this quarter and I will ensure I do not get caught holding if that indeed happens to RGEN. If the good news is truly good news, it will take more than one day to reach peak levels so, I can always jump back in and catch enough of the ride to profit at a lower level of risk. My trading style focuses on effectively managing risk and holding into earnings is often times more painful than profitable.

As always, do your own homework to see if you agree. Good luck out there.

Disclosure: I am long RGEN.

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