Nice Recovery in biotech today with our mid-cap index up almost 1%. Without doing a lot of detailed analysis it looks like stocks that have major institutional sponsors are rallying. Smaller caps without significant volume are still lagging. Two high fliers : Vivus (VVUS $22.15) and Medivation (MDVN $75.24) regained some composure after a bashing yesterday.

This Seeking Alpha article notes how major funds can drive stocks up especially Fidelity who has become a big player in biotech. This has always been the case in biotech (See our article “The Icahn Effect” ) where sponsorship drives stock gains. Many Fidelity funds have big biotech holdings and their flagship fund FBIOX ($97) now has $1.8 B in assets and is up about 15% YTD.The Rayno Life Science Portfolio is up 0.9% today with recovery in some well known names with volume: Exact Sci (EXAS $9.89), Exelixis (EXEL $4.95), Optimer (OPTR $12.80),Regeneron (REGN $121) and  Seattle Genetics (SGEN $18.67). But Virophrama (VPHM $21.69) is down again today 3.34%.

With an hour to go the rally is losing a little steam particularly with NASDAQ stocks.

Macro Issues Kill Bullish Sentiment: Weak Jobs Data and European Debt Crisis 4/10

Even AAPL Cannot Buck the Fear Down 0.82%, But Gold is Up $17

The sell-off that began last week accelerated today for the fifth day, with major indices off more than 1.5%. Turning to our bellwether ETFs QQQ  is down 1.6% and a much bigger loss in the IBB ($118) down 2.8%  and 4.2% over five days. However the IBB is still above its March 6 low of $116.54. So the biotech bull is still intact but profit taking is in full force with most bio indices up over 15% YTD. High fliers are being hit particularly hard with Alexion (ALXN $88.64) down 3.8%, Medivation (MDVN $73.66) down 5.36% and Regeneron (REGN $116.36) down 3.9%.One of our focus stocks ViroPharma(VPHM $22.89) was down 20% as US Regulators are permitting the sale of copycats of their drug Vancocin to come on the market. Watson and Akorn will be selling generic versions of the drug for treating the bacterium C.difficile.

We recommended recently that investors take a little off in biotech stocks, avoid speculative stocks and hedge their portfolios due to the big Q1 run-up. The Rayno Life Science portfolio is off 3% today with red all across the screen.

The first quarter earnings season begins today with Alcoa and Q1 earnings should be drive the market in the coming days with reduced expectations and slower growth,

%d bloggers like this: