The BTK- the biotech index, has been under some long overdue pressure of late. This is a simple correction in an ongoing bull market for biotech. Since the end of March, the BTK has fallen from 740 to 676, up from a low of 303 in 2002.

This pullback is offering some trading opportunities in stocks falling back to perfect 61.8% retracement levels, and I am looking for same.

GNTA is a perfect candidate for a rebound. A quick look at the chart yesterday brought opportunity into the crosshairs. I took a very brief fundamental look at the company. They are in the cancer therapy business.

I noted that the company had completed a $41 million financing in March at $2.15 per share. Since then, there have been no major events either positive of negative. I figure if $40 million likes it at $2.15, I should love it at $1.75

Here’s the chart:

Note that the stock charged up to $3.50 in December. The stock has now completed a perfect 61.8% retracement of it’s big move from last June through December.

Here’s what’s great about 618′s- if the stock trades much below, you know it’s time to sell technically. Therefore, you can keep a tight stop. Odds are you are more likely to get a bounce.

I was in yesterday for 10,000 shares at $1.72. I’ll probably sell on a bounce back above $2. I’m in this just for a trade. Since this is a weekly chart, I’m hoping the trade works out within two weeks.

If you are looking for a trade in an oversold stock- here’s an idea. Comments and questions are welcome.