Biotechs Bounce Back: Up From September Lows-Markets Surge Ahead
- XBI Up 1.66% to $97.16 up from 3 month tech support of $95;IBB up 1.39%.
- Broad rally brings Dow up 1%, S&P up 0.81% to fresh highs-strong 4 mo. trend line.
- Sector Winners: Tech (XLK) up 1.18%, Materials (XLB) up 1.08%, Healthcare (XLV) new high up 0.97%, Financial (XLF) up 0.87%, Consumer Discretionary (XLY) up 0.68%.
- Trade worries subside for now, momentum is back to the trend line.
Markets surged in a broad rally today on no specific news but traders were obviously taking the cue from JPMorgan’s (JPM) Jamie Dimon that the trade war, for now, is a skirmish. Financials even perked up as 10 year treasuries hover at the 3% level.
Large cap biotechs were green with ALXN and VRTX leading the pack, AMGN our top large cap pick at new highs, ABBV up 1.82% trying to recover from recent bad news on Humira kickbacks, and even lowly CELG up 1%. We nibbled on Alexion (ALXN) today at about $124.
Many mid-caps were up over 2% including our new pick Tesaro (TSRO) up 2.16% to $37.81. In early September we picked TSRO at an average price of $33. GW Pharma (GWPH) the leading cannabis stock, but for biopharmaceutical discovery and development, soared 10.7% to $170 a new high. GWPH is up 54.4% over one year and now has a market cap of $4.79B with $249M in cash.GW Pharma is based in the UK and has been around for several years and today benefiting from the cannabis stock mania. The biggest cannabis brands are leading the market, due to the growing interest in cannabis within healthcare. Healthcare and cannabis have formed a tight partnership that seems to have an excellent benefit to the world. With the research and development of medical cannabis, companies developing strains similar to this violet delight strain have seen positive feedback for medical cannabis-based products. Due to the increase in popularity over marijuana, whether recreational or medicinal, the prevalence of equipment used to smoke cannabis has also increased. People are gaining more knowledge on the many ways to consume cannabis; for example, you can learn what a gravity bong is here, or you can look into why people may use edibles instead to achieve a ‘high’.
Mid-Cap losers were CRSP down 5.59%, ICPT down 0.43%,LGND down 2.42% and NVCR down 5.32%. Acadia (ACAD) soared 26.5% from its low of $15 to $19.11 on news of a positive safety profile in its FDA post-marketing review of its Parkinson’s psychosis drug NUPLAZID.
Holding all core positions for the usual Q4 rally but Q3 earnings need to be on track. Healthcare is still a top sector and relatively safe from geopolitical events.Trade and tariffs remain the biggest threat to this bull market but keep the FED in mind.
Disclosure long several large caps, FBIOX, and TSRO.