Update-4 12/10….Nice snapback rally in NASDAQ up 0.54% with many nice moves in gene therapy from ASH. XBI up 3.69%
- ASH gives us two big wins : EDIT up 32% on IND application for sickle disease; Sangamo (SGMO) up 50% on Hemophilia A gene therapy. Gene therapy covered at JPM .
- Core biotech positions up FBIOX HOLX PACB VIR.
- New ” re- opening” positions in the green: LPX XME .Energy trade risk on.
Update-3 12/9 2 p EST Speculative stocks are selling off; raise a little cash. Momentum players are selling. NASDAQ down 2%, XBI down 3.28%. MRNA down 9% to $154. Doordash post IPO valuation up 73% at $175!
J.P.Morgan downgrade of high flying software stocks triggered sell-off. Looking for rotation into “re-opening” stocks which has been underway.
QQQ at $301.85.
Big losers today with two hours to close : NVAX, OSUR,PACB TDOC etc,.
Update-2 12/8 3:30P …markets racing towards new highs helped by options speculation. NASDAQ recovered in early trading and is now up about 0.5%.Our core small cap positions in OSUR and PACB are up again today and clearly something new is driving Orasure (OSUR). EDIT has been our big winner up over 40% in less than one month. The XBI is up 1.60% to the $139 handle so if this ETF holds biotech will remain strong.
AZN, JNJ and PFE are up from their vaccine news, but data on AZN and JNJ not out yet. All large cap biopharmas look good. The IBB is up 1.39%. With expectations for 2021 looking more bullish from more strategists and many investors are overweighted in cash and bonds so we have stepped up our trading activities.
Trading Update: Here are some of my new non-healthcare “re-opening” trades doing well: CLOU, DKNG, LPX,LBTYA,TWLO, UBR, XME. In biotech my HOLX, MMED are doing well. Not so good are AGIO (sold), BCLI, MGTX and NBIX.
Update-1 12/7 after close on a quiet day with the NASDAQ up 0.37%, XBI up 0.93%, IBB flat at $147.81, XLV down 0.62%. Large caps were flat except small gains in AZN and MRK. Financials and industrials were weak. Pandemic concerns are back. Gold is on a five day rally.
- Vaccine leaders: BNTX, CVAC, PFE, MRNA; loser NVAX.
- Focus Stock: Orasure (OSUR) up 7.235 to $12.75 with no apparent news.
- AstraZeneca (AZN) up 0.97% looks good.
- Gene Therapy winners:CRSP, EDIT, NTLA. Editas Medicine (EDIT) up 13% to $39 presented data at ASH on EDIT-301 for sickle disease.
- My recent biotech long trades that are not doing well:AGIOS. NBIX,
Healthcare Stocks Perk Up-And Still Look Solid for a Core Portfolio.
- Market Rally broadened again this past week with gains in precious metals, commodities, and international stocks because of a weak dollar. All major indices are at new highs.
- Dichotomy of surging COVID infections, renewed lockdowns with “Risk-On ” markets looking forward to a “re-opening” global economy in 2021.
- Market has high expectations for the Vaccine Roll-out from Astra-Zeneca, Moderna and Pfizer.
Healthcare stocks perked up over 2% this week depending how you weighted your portfolio. We provided this model portfolio (see below) of healthcare and biotech stocks five weeks ago including well known ETFs that give you broad participation in biopharma, healthcare providers, and small cap speculative plays.The bull marker action shifted to overdrive in recent weeks led by expectations of a COVID vaccine early in 2021.We have always been bullish on large cap biopharma with dividends as represented by the IBB and selected stock picks: Abbvie (ABBV) and Merck (MRK). And traders can add more power to their portfolio by adding the XBI, a small cap strength indicator.
Recently other sectors have been soaring on the so-called “re-opening” trade: industrial, financials and energy. For the time being I view these moves as trades because they require earnings and an economic recovery to support the huge stock gains. For example since early November the XLE energy ETF is up 30%! Healthcare and biotech stocks are core positions in any portfolio because of demand for products and services. The business model for biophrarma is likely to remain in a growth/value mode because of product innovation now catalyzed by the roll-out of vaccines. But technology and healthcare sector remain strong and key to future gains. Many top strategists have raised their S&P targets for 2021 to the 4000 level as cyclical and value stocks participate in the market regardless of the sector it is looking like small caps will lead the way.
Portfolio Management Can become More Difficult-Are you Trader or an Investor?
Over the past few weeks I have been more aggressive adding positions in the re-opening trade like CNQ, LPX, XLI and XME. Emboldened by the performance of my small cap more speculative portfolio with stocks like BLCI, EDIT, GNMK, PACB and VIR, I am a more active trader. Just this week Renaissance capital (IPO) noted two biotech IPOs have had meteoric moves with KNTE up 117.3% and SEER up 197 %! Vaccine developers CVAC and MRNA were also up over 20% but other than a few trades I hold only a few positions and missed the big moves with COVID vaccines.
We will offer more trading picks on what promises to be a good week. The ASH is coming up this week.
Macro situation could be volatile near term with no “Brexit Deal” and the Gov stimulus negotiation.Keep in mind that we are transitioning to a new Government in the US.
Long ABT, ABBV, AZN, EDIT, FBIOX, RHHBY, MRK, UNH, VIR, XBI etc.
|Stock/ETF||Ticker||Price 10/25||Weight||P 11/13||P 11/27||%Perf||P 12/4||% Perf|
|iShares NAZ Bio||IBB||136||25||141.06||143.22||2.27||147.8||1.9|
|iShares Russell 2k||IWM||163||10||173.51||184.37||16.56||188.2||3.97|
|SPDR S&P Bio||XBI||117||5||125.04||131.46||11.95||136.2||2.29|