Update-2…Biotech rally Friday and Gene Therapy stocks

One clue to the stealth rally on Friday is this article in Barron’s published Saturday (? hmmm)

Why Big Pharma is Diving into Gene Therapy

If you cannot access this article and are not a subscriber go plunk down $5 as there is other good stuff on the FED in this 3/4 issue. Some stocks mentioned are: QURE RGNX BOLD VYGR MGTX SLDB BMRN SRPT.


Update-1… Stocks Hold the Bullish Course with Divergent Views

It’s crazy the green screen  in biotech is back! Gene therapy stocks: CRSP up 12.4%, EDIT up 15%, NTLA up 11%; Puma Biotechnology (PBYI) up 39% on financials-soaring NERLYNX Q4 Revenues of $61.1.

Yesterday’s sell-off was short lived as most mid and small biotechs came back strong despite some mixed views. The failed diplomacy of Trump’s personal efforts with North Korea brought focus back to China and the need for a trade deal. Large cap China stocks have been rallying since early January creating positive sentiment amidst skepticism from analysts.Not so blistering economic data assumes a FED on hold?

And  the biotech tape remains hot with M&A as the driver.

  • S&P at October resistance level near 2800.
  • XBI breaks through to  $91.81 above mid-October highs.
  • The GDP rose at 2.6% in Q4 2018 better than forecast easing concerns of a slowdown .


Momentum Eases in a Stealth Biotech Sell-Off

The huge run up on small cap biotech stocks may be slowing as we reach upper limits on the technicals. The leading ETF in 2019 was down 1.23% to $89.15 as it could not break the $90.50 level this week; XBI is close to an intermediate top but below its summer 2018 highs of $101.55. Gene therapy was the hot ticket earlier in the week after Roche ADR (RHBBY) bought Spark Therapeutics (ONCE) for $4.3B.

Sentiment may have shifted because some Bristol-Myers (BMY) up 1.37% investors may not go along with the merger with Celgene, Inc.( CELG) down 8.65%. The vote is April 12.

Many Mid-Caps took a 4% hit today on no news in particular but  this sector had the most momentum:

  • Biggest losers: ANAB down 4.04%,ARRY down 1.84%, BLUE down 3.43%,CRSP down 3.65%, IMMU down 4.48%, NBIX down 4.93%,SRPT down 4.91% on high volume
  • Some Mid-Caps were up: ACAD up 3.8%, ARNA up 1.53%,BPMC up 4.42%, ICPT up 7.53%, SGEN up 0.97%.
  • Mid-Caps still near the top of their 52 Week Range: ACAD, ARRY, ARNA, GWPH, IONS, NVCR.

Modern (MRNA) had been a good trade and was up 2.26% today to $22.60 as the stock tries to recover  from its December post IPO lows when the market was in free fall.

Our small cap picks were down on profit taking: AMRN down 3.35%, Genmark (GNMK) down 3.35% and Teledoc (TDOC) down 6.7% and worse after hours on poor guidance.

Unless the technicals improve it looks like the momentum is gone and it is time to be more selective. However as of 12:40 AM EST futures were up with the Russell 2000 hitting highs at 1583.

Pin It on Pinterest