Caution is Warranted by Technicals
Given the toppiness in the biotechnology sector and the stalling of the IBB ($146), it looks like momentum is waning and some MO stocks favored by BIG money are selling off. Nonetheless we have not made any portfolio recommendations other than raising a little cash. We will update if there is a correction with some overweighting such as Cubist (CBST) and Gilead (GILD) but new buys are not recommended at this time except Optimer (OPTR) as we noted earlier this week, We expect a modest sell-off should NASDAQ falter and keep in mind that seasonality can be weak for stocks in late Q1.Remember the biotech sector was up 35% in 2012 and is up 6-8% in 2013 YTD. All that being said small and mid-cap stocks in our index were lively (CLDX, INCY, ISIS, NKTR) today with some big winners so speculation still abounds.
The following focus stocks have sold off 2013 highs:
Alexion (ALXN $87.63) Off 5% YTD.
Amgen (AMGN $84.72) Off 1.7% YTD.
Medivation (MDVN $53.35) MO stock hedge or short trade
Regeneron (REGN $169.24) Off 1% YTD.
Strong outperformers in 2013 still near highs:
Albany Molecular (AMRI $7.87) Up 49% YTD still valued at 1X Revenues.
Biogen Idec (BIIB $164.59) Solid technicals.
Gilead (GILD $41.60) Solid technicals and up 13.3 % YTD. Hard to buy in on weakness.
Immunogen (IMGN $14.50) Laggard up 13.65% YTD.
Optimer (OPTR $11.78) Laggard up 30% YTD.
Pharmacyclics (PCYC $80.21) Up 39% YTD but due for a correction.
Seattle Genetics (SGEN $27.80) Up 20% YTD.
Viropharma (VPHM $25.69)
Here is our 2012 YTD review from December 24, 2012: