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| | Sell in May and Go Away
The market was freaking out over earnings, housing, Europe, and potentially poor numbers from Apple (NASDAQ:AAPL). Lo, and behold, the results were "spectacular-rific," according to the bulls, and even awesome by the bears. In response, the market roared with a vengeance only to take stock of itself, which is what you should do with the stocks you own, right now.
There is an old adage that says, "Sell in May and Go Away." This is the second half of what some refer to as The Halloween Indicator, which proffers that stocks perform best from November through April. Plenty of "backtesting" has looked at 10-, 20-, 40-, 50-, and 60-year periods, and in most cases the majority of gains are in fact borne from November through April and losses in May through October.
Of course the performance of the market the past two years in the May-October period has been nothing short of dreadful, which skews the average returns of the past 10 years. What will May and beyond portend? What should you do in anticipation?
The Next Breakout
At Penny Stock Junction, we are tasked with identifying great opportunities that are priced $5 and below. However, we've come across a situation that appears to be so good, we're going to tweak that guideline and introduce a $6 stock that is primed to hit $10 before you know it.
A little bit of background is important here. Since the announcement in January that Bristol-Myers Squibb (NYSE:BMY) had planned to buy Inhibitex, Inc. for a roughly 140% premium, there has been a big run on biotech companies with a presence in the hepatitis treatment arena. In fact, right around that time, we introduced a company that has benefitted from this rise. Dynavax Technologies Corp. (NASDAQ:DVAX - $3.68) is up more than 25% since that blog was published here on the Junction and we remain bullish on its prospects.
Nonetheless, since the original BMY story hit, we have been scouring the market for other hepatitis treatment companies that could be the next Inhibitex. We think we may have found it - Medgenics, Inc. (NYSEAMEX: MDGN - $6.19).
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