Conclusion, Investment Implications, Strategy

Biogen Inc.(BIIB) recently broke down from more than 3 months of sideways investor indecision, targeting an additional 31% decline to $209.50 per share that will remain valid below the $316.85 area.  This is an Asbury Momentum idea.

Analysis and Rationale

Biogen Inc.(BIIB) discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases worldwide. Biogen Inc. has collaboration agreements with Genentech, Inc.; Ionis Pharmaceuticals, Inc.; Eisai Co., Ltd.; Alkermes Pharma Ireland Limited; Bristol-Myers Squibb Company; Acorda Therapeutics, Inc.; AbbVie Inc.; Skyhawk Therapeutics, Inc.; Neurimmune SubOne AG; and Sangamo Therapeutics Inc. The company was founded in 1978 and is headquartered in Cambridge, Massachusetts.

Chart 1 below plots BIIB daily since August 2019 and shows that price recently broke down from more than 3 months of sideways investor indecision.  A sustained decline below the lower boundary of the indecision area, currently at $313.32, would confirm the breakdown and target an additional 31% decline to $209.50 per share.

Chart 1

Table 1 below shows that, considering the aforementioned downside target and a protective stop placed above the $316.85 area, a short entry price of $302.08 would provide a 1:6.3 risk/reward ratio (risking $1.00 to make $6.30) with an initial risk of 4.9%.

Table 2


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