Can Biotech Leadership Continue Up 20% YTD
Biotech stocks were roughed up on Friday with a potential market rotation out of healthcare into technology. The XLK Technology SPDR was up 4% for the week compared to only 2% for the IBB. The XLK holds large cap stocks such as AAPL,MSFT,FB GOOG etc.The IBB is near its all time highs but the short term double top should be watched. Both the FBT and XBI hit highs around 3/19.
- The Healthcare sector lagged Friday down 0.39%.
- Most mid and small caps were in the red on Friday but three Rayno picks were up: CLDX,CLVS and FCSC.
- Our two top large cap picks are Gilead Sciences (GILD) and Regeneron (REGN) will be important bellwethers for large cap biopharma when they report earnings on 4/30 and 5/7 respectively.
Biogen Idec (BIIB) Stock Down Over 6%
One day does not make a trend but large cap tech stocks are soaring today on earnings (AMZN, GOOG, MSFT) and large cap biotech stocks are weak led by disappointment in Biogen Idec’s revenues (ALXN, BIIB) and a possible slowdown in the MS market. Alexion (ALXN) announced yesterday and missed forecast with earnings of with a profit of $91.3M or $1.28/sh. compared to estimates of $1.32/sh. Alexion product sales increased 25% year-on-year despite currency headwinds.
Celgene (CELG) bucked the trend up 2.5%.GILD reports 4/30.
Overall biotech stocks were mixed with the FBT flat and the IBB down 0.67%. Mid caps were mixed. Overall red dominated over green as of midday trading.
We will update over the weekend on a possible momentum shift out of biotech into tech that is earnings driven.