5/11/20 330p EDT Crazy market running up again in healthcare, life sciences and biotech; cyclicals continue to lag. XBI break-out to new highs at $104 up 4.7%. IBB up 3.94% to $133. This run reminds me of JY 2015 last big blowoff and speculative frenzy. But small cap ETFs lag: IJR, XLV up 1.63% to $101 but below 12 mo. highs of $105. Lets see if this biotech MO rally holds at close
- momentum rules: MRNA TDOC
- gene therapy stocks running : CRSP DRNA EDIT MGTX NTLA
- mid-cap green screen:ANAB BPMC INCY RGEN etc
- large caps solid gains: ABBV AMGN BIIB GILD VRTX
5/10/20 Biotech stocks still look solid in here but unless you are a momentum trader I would not add new positions. Near term i think therapeutics and tools are more important than vaccines to show progress against virus. Here are some trends to look for:
- continued uptrend in small and mid-caps- IJR XBI; micro-cap speculation is up.
- some rotation out of healthcare to DOW and cyclical stocks.
- therapeutic over diagnostics because of the run-up in Dx.
- our new long trades recently are : AXDX PACB VIR XNCR.
5/8 Update COVID Vaccine Stocks on the Move MRNA VIR
Small and Mid-caps pick up momentum
The strong biotech rally rolled on to new highs as the XBI touched the $100 handle up from March 16 low at $65.95! Coronavirus driven stocks were mixed but COVID vaccine plays were boosted by milestone news and MRNA was up $11.39% and VIR up 3.08%. The biotech and tech strength of the past week broadened to small caps with the IWM up and the IJR up 3.86% and the IJR up 4.24% a significant trend since they rallied in April then faded.Large cap biotechs held but momentum eased as the buyers placed bets all around especially AAPL, DIS and TSLA. The DOW gained ground at the end of the day up 1.91%.
COVID news will pepper the market every week creating volatility among individual stocks but the primary metric is coronavirus cases which are still climbing nationally. Although many scientists and healthcare policy leaders believe the best solution is a vaccine we urgently need short term treatments and diagnostic tools that can arrest the virus once an individual is infected. Given the history of vaccine development it would be extremely difficult to have an approved vaccine by Q4 2020. Apparent leaders in the vaccine race are BNTX, INO and MRNA but this changes week to week.
May 4 …Biotech and Coronavirus Focus Stocks Come Back Strong!
Update May 5…Rally expected today for Cinco de Mayo.
After a bad day Friday and a lot of dire economic news Monday biotech stocks had a remarkable performance given the recessionary backdrop. So stay long life science , healthcare and technology stocks until the charts signal warnings. Everything is about containing COVID right now and biotech stocks offer breaking news, deals, and stable revenue with dividends. The IBB was up 3.02% to $124.55. NASDAQ was up 1.23 % and bodes well with the XBI up 5% to $95.43.
- First among our top picks movers today was GNMK down 6.8% after a nice 3X run as momentum players took profits.
- Roche ADR (RHHBY) our top core holding popped 3.29% to $44.25; REGN was up 3.11% and VRTX soared 3.84%.These 3 stocks are leaders and GILD is a strong HOLD.
- Other coronavirus plays today of note as a COVID vaccine news was deemed critical: INO up 9.24% , MRNA up 5.36% and VIR up 6.85% on a deal with Alnylam (ALNY) for vaccine development.
- Gene therapy stocks snapped back: CRSP, EDIT, RGNX, MGTX etc.(see previous posts)
- Diagnostics and Tools stocks we own: AXDX, GNMK, ILMN, LMNX, VCYT. We missed Orasure (OSUR) a Company with potential saliva DX for COVID.
Coronavirus Stock Performance
We started tracking these stocks in early March when the pandemic data exploded and news coverage picked up. We are long term holders of several large caps in the diagnostics and vaccine space that are not shown here like Abbott (ABT), Merck (MRK) and Roche ADR (RHHBY). In the tools space we also hold Illumina (ILMN). These stocks have been very volatile especially in the vaccine area because timelines and milestones for clinical trials are longer term with major news not expected until Q4. The smaller diagnostics companies will track revenues and regulatory approvals and our favorite is GenMark Diagnostics (GNMK) which has a proven platform and a COVID Dx product.
The tests for COVD 19 are coming on quickly and are reliable and accurate. However the Antibody test still has issues but expect specificity to be in the 99%+ range depending on the manufacturer.
- Q1 Stock Performance Leaders Biopharma and Vaccines: INO VIR MRNA
- Q2 Stock Performance Leaders Diagnostics: CODX CEMI GNMK
Coronavirus Focus Stocks-YTD Performance-as of 4/30
|Company||Stock||Price 3/6||%Perf||3/16 P||MCap||4/30||Mcap$B||%Perf|
- There are many other small cap diagnostic and vaccine players.