Update-3 10/15 1;20P… Both the IBB and XBI are stalled at the current 2020 double top. Our new picks are holding OSUR at $14.65, PACB $14.42 and VIR at $42.
10/16 11 a BioNTech (BNTX) and Pfizer emerging as vaccine leaders.Data coming soon.
Update-2 10/13/20.…a busy day with SCOTUS Hearings, Apple Conference and bank earnings left the market flattish. Eli Lilly (LLY) lost 2.8 % to the $150 handle on news that their antibody drug was paused because of a safety concern. The trial was designed to test the benefits of the therapy on hundreds of people hospitalized with COVID-19.
As you can see from the strength in the XBI, at new 5 yr highs. Biotech stocks are speculative with a lot of momentum in small caps .
- The IBB held at $144.34 near its highs for 2020.
- The XBI cruised to 12 Month Highs at $122.26 up 1.42%.
- Coronavirus stocks had many good gainers: BNTX up 4.85, NVAX up 6.4%, MRNA up 3.96%,QDEL up 1.46%, TDOC up 6.33%,
- JNJ dropped 2.29% on the vaccine pause news from yesterday offering hope for other vaccine stocks today.
- Overall a good day for life science stocks; Our current focus new longs are OSUR, PACB and VIR all in the money. We sold CRSP and XBI too soon.
Update-1 10/12/20....Market continues its strong 5 day run dominated by large cap techs with the NASDAQ-100 QQQ up 3.17% to $294 level close to 2020 highs of $300. Healthcare stocks ticked up modestly XLV up 0.68% with perception that DEMS offer strong support for expansion of the ACA. But futures tonite 10/12 are a tad weak.
EXPECT wild swings in this momentum market.
- JNJ pauses coronavirus vaccine trial after unexplained illness.
- Coronavirus stocks were mixed with gains in GILD up 1.1%, MRNA up 3.16%, VIR up 6%. XBI held the $120 handle. Big losers were GNMK down 12.79%, QDEL down 2.63%.
- Near term trading focus should be antiviral stocks . AZN was up 1.1% on late stage antibody therapies (not a cure) for COVID-19.
- The IBB held near its July highs at $143.65.
Biotech stocks are Poised for Another Run in 2020
A momentum market can be hard to trade and that is why you need to always have core positions like funds and ETFs. Our two long term funds are doing well in 2020 and longer term because we’re in a secular bull market for biotech stocks. Among the fundamental drivers you know if you have been reading our columns:
- Breakthrough biopharmaceuticals offer potential treatments for Coronavirus pandemic.
- Molecular diagnostics are available to diagnose, control and track the virus.
- Biotech stocks offer top line growth which is hard to find.
- M&A is picking up with recent deals for Immunomedics and MyoKardia.
Today Eli Lilly (LLY) announced that its developmental antibody treatment may be effective for treating COVID-19 and filed for emergency use authorization (EUA) with the FDA.
.Recently we offered a playbook for investing in the biotech sector. To simplify this further here are two Mutual Funds that are long term holds:
Fidelity Select Biotechnology Portfolio (FBIOX), holds major large caps like ABBV, REGN AMGN, VRTX plus many mid-caps. Up over 15% YTD.
T.Rowe Price Health Sciences Fund (PRHSX), a diversified fund with major large caps in devices, diagnostics and tools and healthcare like UNH, VTRX, TMO, BDX and DHR.Up over 12% YTD.
You can complement your portfolio by trading or holding the largest ETFs :
The SPDR S&P Biotech (XBI) the best indicator for momentum and bullishness is up ovr 3% today at $118 level.It favors mid and small caps and reached a high in July but is still up 24% YTD.
The large cap weighted iShares NASDAQ Biotechnology (IBB) is up 17% YTD and tracks the FBIOX well.
We also provided near term trades which have done well over on month: Orasure Technologies (OSUR), Pacific Biosciences (PACB), Vir Biotechnology (VIR).
What is unusual about today’s trading is that mid-caps and gene therapy stocks are doing well a bullish sign.
Coronavirus stocks running today: GNMK up 6.8%,MRNA up 3%, NOVX up 2.4%,QDEL up 11%, TDOC up 2.4% etc etc
But remember it is a momentum market with politics as an overhang.