Biotech Stocks Cruise Through The Volatility…Update-1 Risk On

Update-1 5/27...AstraZeneca (AZN) inched up to $56.89 leading the large caps today. Moderna (MRNA) rose 2.25% to $179 level close to its 52 week high of $189. VIR was a big loser down 5.59% to $43.20. Both the ARKG and the XBI are in a stable intermediate bottom signaling a better market for small cap trading. Many mid-caps were strong:  ASND, BHVN,  LGND, NVCR, RETA, RGEN, SRPT.

I am going  to add selectively new biotech positions  looking for a rally that can go through July.

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Biotech Stocks Cruise Through The Volatility 

• Large cap Biopharma Offers Value at a Reasonable Price.
• Time to Nibble on Hyper-growth small cap stocks.
• Watch for Bounce in ARKG and XBI to Add Beta.

We recently covered valuations and performance of Large Cap Biotech stocks and found that they were a good anchor to any portfolio because of a low PE  with dividends yet outperforming NASDAQ YTD. Over the past week with market volatility exacerbated by Bitcoin trades, you can see in the chart below that healthcare and biotech prices were stable.

The XLV Healthcare Select SPDR is up 10% YTD. This would be a safer way to play the overall sector as per our recent article on Diversification.

As we approach the ASCO Meeting in early June we should get traction from clinical data presentations in immuno-oncology. Some favorite stocks today are already moving today as of 2:30 p EDT trading  in anticipation of product pipeline news: BMY, LLY.  Other movers today are :MRNA,  NTLA, RETA…

This good be a good time to add beta to your portfolio as the small cap, equal weighted XBI is in bottoming process at the $125 level. The XBI reached highs above the $170 level in the speculative blowout just recently in early February.

We have begun a new small trading position in the volatile ARK Genomic Revolution ETF (ARKG) to add beta to our portfolio. We added at $78 and looking for a move to $90.