Biotech Stocks Take A Breather: NASDAQ off 0.3% at 3597
A little profit taking has set in after it seemed that the market would roar all summer. From the action in mid-cap biopharma stocks it looks like hedge funds are taking some off among high flyers.NASDAQ has been up for 14 straight days or 18% YTD and biotech stocks usually follow.The QQQs ($75.31) are up about 8.5% since the June 24th bottom and the life science sector as tracked by IBB (190.83) is up 15%! The IBB showed a bit of a blow-off top on Friday and early on Monday as it moved to an all time high of $194.55.The IBB volume was very heavy on monday coinciding with option expirations.The XBI ($118.20) showed a similar trend with heavy volume on Friday and hitting a new high of $120.72 on Monday.
Some of the bullishness is tied to takeover trades with Onyx(ONXX) in the news since early July with the Amgen (AMGN) bid and now expecting multiple bids (BMY,GILD,PFE ?) as oncology is a strong market growth sector. Alexion (ALXN $107.29), one of our top picks, has been extremely volatile hitting $125 on Friday with a Bloomberg story about a buyout from Roche ,although skeptics have chimed in about the price with a current market cap of $20B. Also Alexion is a major player in orphan drugs with revenues forecasted at $1.5B this year and is not a product focus area for Roche.
Many Rayno Life Science stocks are at all YTD highs and today we have some new movers among molecular diagnostic stocks:
Qiagen (QGEN $20.59) one of our laggards is up nicely from a low of $19 recently.
Response Genetics (RGDX $1.77) up 1.7% and finally getting traction on the recent news on the Blue Cross/Blue Shield deal.
Sequenom (SQNM $4.80) up 3.34% making headway from a May low and showing good progress in 2013 with Sales expected to grow to $200M by year end.
The biopharmaceutical sector was much weaker than the indices show. Our mid-cap index of 50 stocks showed a lot of red and was off 1.9%.Big losers on high volume are: Aegerion (AEGR $76.16) off 4.78%, Aria (ARIA $19.63) down 6.4%, Celldex (CLDX $20.19) off 4% and ISIS ($31.40) off 6.4%.
- No change in Rayno Portfolio Stocks. All are strong holds.
- Have a 10% cash position from profit taking.Don’t buy more at new highs.
- Volatility on the rise in mid-caps so trading is more attractive long and short.
- More awareness of biotech strength in media.
- Core position for new money- Fidelity Select Biotech (FBIOX) up 47% YTD.