Update-1… 7/12/16

Dow and S&P Hit Record Highs, Awaiting Q2 Earnings-Risk Still On-Biotech Stocks Lag

The market continued its post-BREXIT rally helped by low interest rates and WTI crude up 4.56% to $46.80. Gold eased off and the dollar was up. We are still rallying off last Friday’s job report and Alcoa (AA) earnings yesterday. Bond prices and safe haven stocks fell. The NASDAQ rose 0.7% erasing losses for 2016.

Biotech stocks tracked NASDAQ up 0.74% and the more volatile XBI did better up 0.96% to $57.92 but still down 17.5% YTD. The biotech sector will be fighting a recent double top from June and April so are still negative for the last 3 months. Biotech stocks were a little choppy today but three of our picks beat the market: ABBV, BLUE, BMY. Juno Therapeutics was up 28% after hours today after the FDA removed the clinical trials hold.

  • The XLV is now positive YTD better than the QQQ. But energy, industrials and materials outperform YTD. HealthCare will reach 20% of total economy by 2025 or $10k per person.
  • Large cap biopharma earnings will be key to breaking through recent tops.
  • We have hit our near term objective for the sector- off the bottom- now we need good clinical and earnings news to break through.


Biotech Rally Stalls after 8% Move Off Brexit Bottom

  • All of our picks are up although Gilead Sciences (GILD) is lagging.
  • Top winners are Abbvie (ABBV) up 13.9% and Bristol-Myers (BMY) up 23.5%.
  • New pick as of last week is Foundation Medicine (FMI) at $20.40.
  • We added the IBB as a trade at $250, and now is $270.
  • Celgene (CELG) not in our portfolio needs to hold above $104 to confirm recovery.
  • The biotech sector still trails the QQQ Nasdaq-100. Volume is still low.
  • Technicals tell the story as the IBB hit a triple bottom near 240,then rose to 250 at BREXIT event.

IBB iShares Nasdaq Biotechnology ETF daily Stock Chart

Here is the Rayno Biopharmaceutical Portfolio as of 4/14/16 and the current update:

Company Ticker Date Started Price Price 7/11 %Return  Div.Yield
Abbvie ABBV 2/3/16 56.49 64.35 13.9  3.48
bluebird bio BLUE 2/3/16 43.75 48.67 11 volatile/LT  –
Bristol-Myers BMY 2/16/16 61 75.39 23.5  1.99
Foundation Medicine FMI 7/5/16 20.4 21.58 5.8  –
Gilead Sciences GILD 2/3/16 85.8 86.25  2.17
Roche ADR RHHBY 4/4/16 30.36 32.59 7.2 currency/LT  3.15
IBB ETF IBB 6/29/16 250 270.56 8 trade  –
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