Biotechnology may help people but kills traders

Among the things a quoTrader should never do, is trading stocks that depend on the FDA. Just look at this terrible chart of InterMune. Yesterday news came out that ITMN received a “complete” letter from the Food and Drug Administration, the stock got halted – especially nasty, namely intraday – and reopened with a loss of 75%.

All this after it made two days ago a restart in something that can only be called a violent trend. Of course it is also a suspicious trend, because of the double gap that essentially accounted for the whole move.

If you had shorted it some weeks ago, you could have incurred a loss of even 200%. Here we have another thing a quoTrader won’t do: Going short, at least not with single stocks likes this one.

The reason for the up and down is the same medicine and a “slight” change of opinions from officials about it. In this case it seems to be a law that requires studies and not only one study that show that a drug is overall a gain for patients. This prompted the FDA to demand a third phase III trial after external experts (an outside panel of the FDA) recommended an approval earlier.