Where I'm Buying CPRX

Catalyst Pharma (CPRX) is an absolute monster. Not only is the company posting huge sales and earnings growth in a sector that rarely has either, the stock has more than doubled over the last few months.

There are 801 stocks in the biotech group tracked by Investors Business Daily, and CPRX ranks at the very top (see image in chart).

After such a large advance higher, we must remain cautious to the possibility of a retracement. So we need to see signs of additional strength to trigger an entry.

I’m watching for a move above last week’s high for my buy signal. This way, I can place a stop below last week’s low and still get away with a risk of 8% or less on the trade.