Momentum is Easing in Biotech -Is the JPMorgan rally Over?

We need to see which stocks  hold up when momentum decelerates.

it has been a good run for the week but not too frothy.We are “content challenged” in that we sat through three days of interesting and informative investment opportunities have yet to collect our thoughts and notes in order  to write anything new. Newsletters and WEB sites (see list below) have covered the J.P.Morgan Healthcare Conference exhaustively and I have not had time to read through those critically. Monday is a market holiday and offers time for review and analysis and new trading ideas.

  • We will stay long  and overweight healthcare and life science stocks per our call from October 2019. Large cap biopharma with dividends are favored. RHHBY is a good core position. We favor the the XLV for a general  healthcare allocation
  • A balanced healthcare portfolio should have an allocation of large cap Medtech such as included in the (IHI) iShares Medical Device ETF. We hold ABT and BDX and we want to add more mid-cap stocks from the Conference.
  • We hope to have new small and mid-cap trades but need some help from major ETFs and funds like the IWM that buy these stocks. We currently follow AMRN, GNMK, and TDOC and will update trades on future posts. The XBI would be a way to track momentum for these stocks.
  • Excellent resources suggested for tracking individual stocks and news in the biotech sector beyond are as follows:   1.) Endpoints News-John Carroll, 2.), 3.) All have coverage of J.P. Morgan sessions.


Biotechs Sustain Gains for the Week

All indices Are Up in early Trading on Thursday- NAZ at 9325 Up 0.7%

Good indicator for biotech:both the IJR and IWM small cap ETFs are up over 1% in early trading.

It is hard not to get caught up in the barrage of good news and scientific details of the J.P.Morgan Healthcare Conference and the numbers look good over the past five days although the sector was weak on Monday. Specfic stocks with news did much better. And in early trading Thursday  biotech and healthcare stocks are up with the XBI leading up 0.84%.

For Five days ending 1/15:    IBB up 0.6% to $121.73,  XBI down 0.4% tp $96.35, XLV up 1.2% to $103.95.

On 1/15  many of the biopharma stocks we track were strong with following notables::

  • Gene therapy stocks in the green:  ALLO BLUE CLLS EDIT NTLA RGNX SRPT. We are at the midpoint of 52 week highs so not too frothy but careful as it is a volatile group. We added a new position in Editas Medicine (EDIT) based on their presentation.We have traded both BLUE and CRSP in 2019.
  • Mid-caps are the sweet spot of biopharma for news and deals and today most were up. Leaders were: ACAD  AGIO BPMC EXEL MRNA MRTX NVCR XNCR .Nektar Therapeutics (NKTR) stock took a 16% hit as an FDA Panel rejected its opioid pain killer Oxycodegol.
  • Large caps held up on Wednesday noting our top picks after JPM presentations: ABBV up 1.2%, BMY up 0.21%, MRK up 1.79%,RHHBY up 0.87%. But most of these large cap biopharmas are near their 52 week highs.
  • MedTech did well during the Conference with the iShares Medical Device (IHI) at its 52 week high of $270.36.

It is difficult to find new buys so early in the year given the strong gains for Q4 2019; but indeed we did add small positions to our portfolio that is overweighted in healthcare. But before the end of the week we will share some new ideas from the JPM 2020 Conference. We will update this post at the close today.


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