Update-2 10/4 Broad Rally day: all major averages up 1.4%, NAZ at 7982. Risk back on.

  • But biotech lags major indices  IBB up 0.75%, XBI up 0.21% to $76.82.
  • Better trade for biotech has been large caps: ABBV, AMGN, MRK,RHHBY VRTX.
  • Mid-cap movers: BLUE up 3.97%, GWPH up 5.22%, NKTR up 4.2%, SRPT up 8.5%
  • DX and tools focus stocks rally: DHR up 2.05%,ILMN up 1.8%,NSTG up 3.24%, NVTA up 1.78%, TMO up 3.32%, VCYT up 2.45%.

Here is the chart that needs help. small cap action has not been good since Q1.

Update-1 10/3 11.15 am EDT    Biotechs Go Green: added to XBI position at $75 level

  • Large caps go green. ABBV AMGN,REGN,VRTX
  • Mid-caps solid green esp: AGIO MRTX NBIX SRPT
  • NASDAQ up 0.45%, XLV up 0.46%
  • Caution as there is whipsaw potential -IWM still down


Biotech Snapshot as Bearish Trends Take Hold

Healthcare Remains a Laggard Sector: XLV down 0.98% to $89.25.

Our large cap biopharma picks were doing well through last Friday but not Monday on a broad sell-off where major averages were down over 1%. From previous articles  we wrote about key trends in biotech the technicals predicted this weakness and the macro backdrop for healthcare has not been favorable because of “political uncertainty”. Add to this negative sentiment the ISM data today, the lowest in many years, signaling potential weakness in the economy.

Biotech stocks recovered a little yesterday but the major ETFs tracked NASDAQ losses:

IBB down 1.51% to $98, XBI down 2.51% to $94, FBT down 1.59% to $121.80.

Large caps were in a red screen mode and our core holdings were down but some held up well:

BMY down 0.12%, MRK down 0.68%, RHHBY down 0.66%, ABBV in the middle of a merger with Allergan (AGN) was down 3.29% to $73.23. ABBV is way up from August lows below $65.

As we mentioned in previous articles, our small cap speculative picks were hit hard recently so that we are reluctant to even trade these volatile stocks.MedTech was doing well but Monday the IHI iShares Medical Device ETF was down 1.55% breaking an upward trend line. We own several large caps in MedTech and our two best small caps are Biosig Technologies (BSGM) down 1.7%  and Conformis (CFMS) up 19.35% on a deal with Stryker (SYK).

My nibble on XBI at $78 is not working now that it is at $74 but I will hold it. My MGTX is off 3.2% to $15.44 despite being mentioned in the Barron’s article over the weekend.My core holding Illumina (ILMN) stock was also off 2.7% to $296.

As you might expect mid-caps were red on Monday except ACAD AGIO NKTR SGEN SRPT XNCR had gains showing stocks picking still can deliver gains.Some moves can be expected from #ESMO2019.

Look for long ideas in biopharma from the European Society for Medical Oncology (ESMO). #ESMO2019  Updates later.

AS of 9am 10/12 EDT futures were weak with the S&P down 0.57% and the NAZ down o.69%.


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