Not too many sectors can claim that they made new all-time highs after the worst bear market that most of us can remember just a few short months after the broader market bottomed.

So, while many market pundits continue to call for a stock market correction as we enter what is historically the worst month of the year for the stock market, I offer three trades in the biotech sector.

The higher stocks in general go, the louder the predictions for disaster will be. But before we circle the months of September and October on our End of Days calendar, let’s take a look at Celgene Corp. (CELG), Gilead Sciences (GILD) and Amgen (AMGN) as biotech plays that should continue the move the Amex Biotechnology Index (BTK).

First, let’s review the BTK. As you can see from the chart below, it has broken out from an ascending triangle to new all-time highs.

The ascending triangle has rules that govern its shape:

• The tops of the waves peak near the same price, following a horizontal trendline.  
• The bottoms of the waves generally follow an up-sloping trendline.
• Five waves compose the ascending triangle (A-B-C-D-E), unless extended.
• Each of the A-B-C-D-E waves is composed of three sub-waves, so it has a 3-3-3-3-3 configuration.
• Volume and volatility tend to recede over the life of the pattern, but this is not a requirement.
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3 Best-in-Breed Biotech Plays

The three stocks I think are the best plays at this stage in the rally are the best in breed in the biotech sector.

Here are the charts and a short description of each pattern the stock is in:

Amgen (AMGN)

AMGN broke the weekly downtrend line and is now forming a bullish weekly pennant or flag. I expect the rally to resume when the back-test is complete on this weekly downtrend line break.

Buy the AMGN Jan 65 Calls (YAAAM). The target is $6, which will give you more than a double on this trade.

Celgene Corp. (CELG)

Short- to medium-term, CELG is consolidating its gains from the last earnings breakout. This is a pause in a stocks upward swing, generally called consolidation before continuation.

Buy the CELG Jan 60 Calls (DXQAL). The target is $5, making this another trade that will be more than a double from current prices.

Gilead Sciences (GILD)

With a weekly symmetrical triangle that will continue until a breakout above the $50 level, I expect a breakout to happen this month or next, so taking a position in the January calls is going to be your best bet.

Buy the GILD Jan 50 Calls (GDQIJ). The target is $4, which is also more than a double from here.

So, instead of sticking your head in the sand and waiting for the market to crash in the next two months, why don’t you start making money-doubling profits on these three biotech stocks? 

The old ways of investing don’t work anymore. But trading options founded on scientific principle can and does work in volatile times like these.

In his latest report, learn how John Lansing leverages the power of technical analysis to identify the short window when a trade is set to go straight up or down. Get your FREE copy here!