Profit Taking Continues With Speculative Biotech Stocks

Many of you who trade biopharmaceutical stocks know that $1B  may be considered a small cap stock. As we mentioned in yesterday’s post there is weakness in many high flying biotech stocks compared to the larger caps. Today the weakness is more pronounced in many “smaller” cap stocks: AEGR, AMRN, CLDX, ECYT, INCY, etc. A detailed analysis will be provided at the end of the day. At this juncture of the 5 year old bull market we recommend taking profits in high flying mid-caps like Aegerion (AEGR $88) off more than 5% after reporting earnings and holding or buying Gilead (GILD).

Update-Caution on Mid-Caps

Our mid-cap index of 50 mid and small cap biopharmaceutical stocks is 90% red with some big hits. As we mentioned yesterday many high fliers (ARIA, CLDX, CLVS) that sold off in early October have not come back since October highs. Synta (SNTA) is down 33% in just five days on Phase 3  results from their lung cancer drug ganetespib.

The widely held large caps are holding up better with Alexion (ALXN) and Gilead (GILD) up  with Biogen Idec (BIIB), Cubist (CBST) and Regeneron (REGN) down.

Today the selling has accelerated with good volume. The major ETFs are also down with the XBI the biggest loser down 2.8%. NASDAQ has come back off 10 pts or 0.25% after the FED indicate no change in policy. Here are stocks to watch, looking for support at early October lows and then mid -August lows. Technicals rule.

Aegerion (AEGR $86.80) down 7%.

Celldex (CLDX $23.22) down 4.77%

Endocyte (ECYT $10.41) down 7%.

Incyte (INCY $39) down 3.9%.

Medivation (MDVN) down 4%.

Puma Biotechnology (PBYE) down 5%.

Serepta (SRPT $39,56) down 5.57%.

No changes in Rayno Portfolios. Hold 10% cash.

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