http://flyingsquidstudios.com/?display=categories The enthusiasm generated by Friday’s jobs report waned after the opening. The shocking 92% decline in shares of GT Advanced Technologies , Inc.(GTAT) due to a bankruptcy filing rattled traders and drove small cap stocks down again near 2014 lows. Investors expected the Company would become a major Apple supplier with its scratch-resistant sapphire glass for the new line of iPhones.
The iShares Russell 2000 Index dropped 0.86% to its 2014 lows around $108 creating a triple bottom but a bearish head and shoulders pattern. Biotech stocks were in the red with many 2-3% losers. If nothing else the pronounced small cap weakness tells us to be careful trading more speculative life science stocks. We have been caught in the red trying to buy the August rally expecting bigger gains in Q4. But today the XBI was down 2.11% and or index of 50 mid and small cap biopharmaceutical stocks was in the red. Some new small cap buys on our list have not been able to get traction:
Celldex Therapeutics (CLDX) down 4.64%, Foundation Medicine (FMI) down 6.26% and Pacific Biosciences (PACB) down 4.68%.
We recommended profit taking in ACHN, EXAS and ILMN. a few weeks ago.
Hold off on new buys in smaller caps as risk is off and momentum waning. Here is a review of Rayno Biopharmaceutical stock picks YTD, at May 2 bottom and since our original call.
W will be attending the BIO Investor Forum in San Francisco and will be reporting.