Investing Wisely - Biotechnology (XBI) - ETF: Forecasts / Confirmations = Results!

By: Steve Bauer | Sat, Dec 1, 2012
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It is Really Quite Simple - F (plus) C (equals) R!

Investing Wisely - Aerospace and Defense (AXE)

It begins with Accurate Forecasting and Analytic Procedures that produce consistent profits, then it requires Well Honed Fundamental, Technical and Consensus Opinion -- Confirmations, and it nearly always ends with Profitable - Results. (F + C = R !)

My most recent series of articles, posted here in SafeHaven.com are: BJK, IAI, IAT, IGV, KOL, XAR, XBI, XES, XHB, XME, XOP, XPH, and XSD. These are my High Profile / Bellwether ETFs that I primarily use in my work / analytics. (To view my 5-Year Charts of the above symbols - Click on the Symbol).

ETFs Provide Guidance

Analytics of a large number of Bellwether ETFs provides very clear Guidance when I go about selecting a Company or ETF to Buy or to Short. For me it is a special kind of Sector or Industry Groups that supposedly the Fund Manager believes his or her selection of Companies will out-perform the competition. There is also very good information available about the component Companies (Comparative Analytics) in the portfolio of the ETF. Sometimes there are advantages of Buying the (Regular) ETF if you are Bullish - or - perhaps Buying the (Inverse) ETF, when available, if you are Bearish. I spend a great deal of time studying many more ETFs than the above 13 that I write these articles about.

Note I - for the above ETFs: a) These are DEFINITELY NOT necessarily my current favorite ETFs to recommend for Buying or Shorting to my Clients! Most often there are other / alternate ETFs that have a much better - Risk to Reward Ratio and Profit Projection. b) These ETFs are all supposedly made up with the Component Companies exclusively from the Biotechnology Industry Group. c) Remember, there are always the most favorable and least favorable Component Companies to consider on my Buying or Shorting Lists within a ETF or the entire Sector or Industry Group. d) To Plug Further Into my Work / Analytics -- Please read or re-read "My Rotation Model". It is all about identifying the most favorable Companies and ETFs to Buy and identifying the least favorable Companies and ETFs to Short during the respective Bullish Cycles and Bearish Cycles of the General Market and that particular Company or ETF. There are always the more favorable Companies as well as the least favorable Companies on my lists for Buying in Bullish Cycles and for Shorting in Bearish Cycles of the General Stock Market. e) You also might also want to read or re-read "My Methodology". f) Risk and Reward Can Be Calculated. I do this work / analytics on every Company and ETF because it almost totally mitigates the Risk of Investing. You might want to read my views on Risk / Reward.


Professors, F + C = R - Forecast / Opinion of: Biotechnology (XBI): (December 1st.)

"My near-term (2 weeks - 1 month) - to - short-term (1month to 3 months) Forecast is that this Biotechnology ETF has been Ascending for well over a year. The Dip in October was tell-tale of a possible end of this primary Bullish Cycle. This fact coincides with my Fundamental - Valuation Analytics perfectly. However, Technically it has rallied for about the past four weeks but the component Company Valuations have not.

Technical Indicators have begun waning since September of this year. The foreseeable appreciation picture for this Biotechnology ETF is not nearly as bright as most financial analysts are publishing. (When I read other financial analyst / blogger articles, which is seldom - many of these Guys / Gals seem to be using some kind of a Crystal Ball rather than old fashioned / solid and basic Securities Analysis.)

After a brief continuation Bounce / Mini-Rally I would expect (XBI) and many Biotechnology Companies to enter another and likely meaningful Pull-Back phase.

As for a meaningful Rally -- it will require MUCH more TIME before this ETF will be in Bullish sync with the above Formula and "My Methodology" for "Investing Wisely." This is yet another Warning!

At the current price of $89.00 it is getting ready for another Pull Back - again -- after this bounce / mini-rally.

This is a Warning that will not be "Confirmed" other than privately via Email to Clients and select prospective Clients. I do not Publicly provide my "Conformations" for Bullish or Bearish Warnings. If you are interested in my "private Email" recommendations, feel free to let me know. Serious Investors Only -- Please.

Here is my list of the Component Companies for: SPDR - Biotechnology (XBI):

AMGN, BMRN, REGN, GILD, AFFY, ARNA, MYGN, CELG, ALKS, MDVN, INCY, EXEL, ONXX, BIIB, ARIA, SPPI, SGEN, DNDN, UTHR, IDIX, PCYC, ALXN, ITMN, CBST, CPHD

For my Near to Short-Term Forecast on any of the above just send me an Email. Serious Investors Only -- Please.

Note II: I would like to reiterate that this list of Biotechnology Companies has and always will have a Quantitative Ranking and Grade within My List of the most favorable and least favorable Companies from which to consider "Investing Wisely." (see my "Report Cards" for how I Rank and Grade each and every Company that I do Analytics on). Second, the Risk and Reward of "Investing Wisely" can be Accurately Calculated for each Company. Your annual Bottom Line can be improved and your Risk of Investment can be lowered. Please consider reading my Article on Calculating / Measuring Risk vs. Reward. I hope you will permit me to help in your quest to profit.

My most current "Report Card" definitely does not present a short-term (three months to six months) to intermediate-term (six months to twelve months) Bullish foreseeable future. (see My Report Card below)

May I suggest that it is most important for you to understand that my work / analytics is based on "My Methodology" that focuses on three key aspects of analytics. The first and primary is Fundamental - Valuation and the second is Inflection Point - Technical Analysis and lastly I also have a long look at Consensus Opinion. These are all weighted - Rankings relative to all my Bullish and Bearish Recommendations to my Clients.


Please feel free to let me know if you are interested in my Email - Guidance and Direction of your Portfolio. There is no cost or obligation. No Fool-In!


How I Do my Forecasting and Get My Accuracy, Results and Consistent Profits...

For further insight into my work / analytics please click on the following URL: http://www.safehaven.com/article/27820/special-notes-supporting-my-articles


To graphically follow my General Market (Indice) Inflection Point (Technical) analysis, please use this URL: http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=1&mn=6&dy=0&id=p50720233760&a=270034212
This comparative General Market Indicator may be the best I have ever seen!


Charts for Biotechnology - ETF

My below two charts also tell the Technical story of the future direction of the Biotechnology Industry Group very clearly.

Please understand that my Technical Analysis work is always supported by my Fundamental - Valuation of all the Industry Groups with-in my universe of (over 300 Industry Groups!).

This Biotechnology is definitely not an ETF to Buy at this time. Over time in reading my articles and keeping track of my ETF (Bullish and Bearish) accuracy you will perhaps have a better understanding of my logo of - Investing Wisely.

Two-Year Chart: Biotechnology ETF (XBI) with a Compare of the S&P (SPY)

2-Year Chart: Biotechnology ETF (XBI) versus SPY

(XAR) and (SPY) are nearly perfectly in sync! Note that (XBI) has outperformed. That's Important...

Five-Year Chart: Biotechnology ETF (XBI) with a Compare of the S&P (SPY)

5-Year Chart: Biotechnology ETF (XBI) versus S&P (SPY)
Larger Image

You will quickly note that the - Green - Biotechnology ETF (XBI) has over the longer-term has been - In Sync - with the S&P - 500 (SPY). This is a BIG Part Of "Investing Wisely."


My (Most Recent) Forecast Summary (for all the above) 13 Select ETFs

Forecast Summary of 13 Select ETFs
Larger Image

Notes for the above Table: Alerts / Warnings have three levels of strength: Level #1 is an initial Alert / Warning to be preparing to Buy or Sell that security. Level #2 is offering more guidance that my Alert / Warning is getting serious. Level #3 is when I have determined that I will use my specific "Technical" skills to determine - "When" - to terminate my positions in that security.


Report Card on Biotechnology (XBI) - (December 1st.)

Company
Symbol
Fundamental -
weighting (40%)
Technical -
weighting (35%)
Consensus Opinion -
weighting (25%)
Financial Analysts are
ALWAYs WAY TOO Bullish...
Report Card - Grade:
(0 - 100 / A - F). The Security
(ETF) is either --
Flat / Ascending or Descending.
Biotechnology -- (XBI ) Good Good Very Good 78 / C + --- Descending

My weighted Fundamental, Technical and Consensus Opinion ratings range from Excellent to Very Poor. Grades below 90 / "A" are not current (never are) Candidates for Buying. Grades above 60 / "F" are not current (never are) Candidates for Short Selling.

Information and Data are ever changing, so "be alert." Every Company / ETF "Grade" can move from a neutral grade (59 to 89 / "D" to "B") to a Buy (greater than 90) - or - a Short Sale (less than 60) in a very short time. This is my on going Work / Analytics and I have loved it for over 50 years.

Remember, it was not all that long ago that this ETF has a Report Card of 90+ with a letter Grade of "A."

Please do not Buy or Short this Biotechnology ETF or It's Components without first talking with a very well seasoned financial analyst or perhaps visiting with me via Email.


I am the guy who wrote the 38 Weekly Courses on Investment Basics. See the link on the right column (side-bar) of SafeHaven.com - Home Page or go to my name under Authors.


General Market - Where are We and Where are we Going?

My "Fundamentals" are Over-Valued. My "Technicals" are Over-Bought. My "Consensus Opinions" are much too Bullish. "Interest and Dividends" are on the Rise. "Insiders" are SELLING their shares. The "Economy in the U.S. and World" is in much more peril than is being reported by the media. Hum!

Buy, Sell, Hold

If you want to "Roll the Dice" rather than plug into "My Methodology" of "Investing Wisely" - that of course is your choice. You now have 13 Select Companies (My High Profile / Bellwether Companies) and a second weekly series of 13 Select ETFs to monitor my Forecasts for Accuracy.

I believe my recent article on Performance, as well as these Company and ETF articles supports "My Methodology" and Professional Services very well. Please Click on Performance for a look at my "Results."

I continue to be Bearish on the General Market and the Economy for the foreseeable future.

I will keep you posted Weekly...


My Email Address is: senorstevedrmx@yahoo.com

Thanks for taking time to read my "stuff."

I would appreciate your Telling a Friend or Two about my postings here in SafeHaven.com. It is by far the best financial blog on the web.

Growing my Botique Asset Manage Services is a process of developing trust and confidence with you over time. I invite your questions and thoughts.


Smile, Have Fun - "Investing Wisely",

 


 

Steve Bauer

Author: Steve Bauer

Steven H. Bauer, Ph.D.

Steve Bauer

Steve has several degrees, i.e. post graduate degrees and doctorate and a great deal of (too much) continued education. For seven years, he did a stent as a University Professor of Finance and Economics.

Dr. Bauer also writes for SeekingAlpha.com. His articles can be viewed at: http://seekingalpha.com/author/steven-bauer?source=search_general&s=steven-bauer

He owned a privately held asset management firm and managed individual investor and corporate accounts as a Registered Investment Advisor - for over 40 years.

Professionally he is a financial analyst and private asset manager / consultant / mentor.

Steve can be reached at senorstevedrmx@yahoo.com

Copyright © 2010-2013 Steven H. Bauer, Ph.D.

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