Update-1 11/22…Another good day but as the S&P 500 approaches 4,600 we are near the top of the range from Aug 1, when the recent sell-off began. The QQQ hit a new high at 390 exceeding the JUL 19 high of 385. Small cap biotechs that we track continue to have within day volatility masking trends.
First the major tracking ETFS:
- The XBI closed at $72.80 near recent highs but with a bit of chop, and above recent downtrend MAs.Lift off from recent bottom at $65 is intact.
- The IBB at $118.72 is more choppy in recent mid-November highs.
- The XLV looks very good off the OCT 30 lows now at $130 handle.
We will review some of the specific trades on our list but Friday could be strong with weak volume so next week will begin the test of the model. CRISPR Therapeutics (CRSP) is already up 82% over 4 weeks so I don’t know how to call that except Regulatory hurdles are being achieved and gene therapy stocks look strong.
I would like to see momentum to continue in: ARKG, CYRX, CRBU, EVH, TXG, VCYT.
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Biotech Momentum Is Picking Up
- Focus trades on SMID or speculative small cap biotechs.
- Trade momentum stocks which are supported by technicals.
- Lower interest rates is positive for biotech.
Earlier in 2023 we had a nice run in SMID biotech stocks. Most have since sold off but now we seem poised for a rally. We updated our WATCH list from earlier this year. Unless your healthcare portfolio was overweight large cap biopharma including Lilly or NVO you are underperforming the market. Healthcare and Bioscience Mutual Funds are trailing the S&P-500 and the DOW. ETFs have not helped as portfolio fillers but they can identify trends. We should play this rally out of a biotech bear market.
I will add new trades as they come up should market conditions look favorable.
Here are some assumptions for trading in Small Cap speculative biotech.
- The XBI is our bellwether for small cap life science stocks.
- Most of the stocks we are tracking and own have good momentum over past 4 weeks.
- Volatility is high on a daily basis. eg CRSP
- Seasonality is good through January.
- Small M&A deals are picking up.
| P 1/20/23 | % Perf | 2/4/23 | 11/18/23 | Perf | ||||||
| Company | Ticker | $ | P | % week | P | 4 wks | YTD % | REC* | ||
| Acumen Therap | ABOS | 5.29 | 2.28 | -40.62 | -57.78 | 1.5 | ||||
| Caribou Biosci | CRBU | NEW | 20.55 | 5.22 | 20.55 | -16.88 | 1.8 | |||
| CRSPR Therap | CRSP | 49.61 | -25 | 55.27 | 4.72 | 67.89 | 55.5 | 67.01 | 2.3 | |
| Cryoport | CYRX | 21.75 | -42.34 | 25.24 | 9.41 | 13.62 | 8.35 | -21.5 | 2.3 | |
| Evolent Health | EVH | 30.83 | 13.74 | 31.96 | 2.21 | 29.33 | 3.71 | 4.45 | 1.7 | |
| Geron | GERN | 3.19 | 9.24 | 3.22 | 3.59 | 1.97 | 6.49 | -18.6 | 1.5 | |
| Hologic | HOLX | 79.66 | 22.41 | 84.68 | 2.28 | 71.87 | 4.16 | -3.93 | 2.4 | |
| Immatics | IMTX | NEW | 9.3 | 8.68 | -13.11 | -0.34 | 1.5 | |||
| Pacific Biosci | PACB | 11.29 | 55.68 | 11.58 | -1.7 | 8.4 | 2.31 | 2.69 | 2.2 | |
| Quidel/Ortho | QDEL | 88.13 | -11.56 | 89.7 | 3.93 | 66.25 | -4.46 | -22.67 | 2 | |
| Supernus | SUPN | 40.3 | 12.3 | 41.61 | 2.29 | 27.43 | 5.7 | -23 | 2 | |
| 10x Genomics | TXG | NEW | 47.84 | 42.17 | 0.76 | 15.72 | 2.3 | |||
| Vericel | VCEL | NEW | 31 | 36.58 | 2.55 | 38.88 | 1.5 | |||
| Veracyte | VCYT | 24.89 | 39.43 | 26.67 | 2.46 | 25.25 | 17.33 | 6.41 | 2.1 | |
| SPDR Biotech | XBI | 86.99 | 14.75 | 90.39 | 1.12 | 71.66 | 3.36 | -12.46 | n/a | |
| wildcard | ||||||||||
| ArkGenomics | ARKG | NEW | 35.28 | 27.57 | 7.07 | -2.34 | ||||
| 11/18/23 | 5 yr | |||||||||
| iShares CoreS&P | IJR | 96.18 | 2.4 | 1.63 | 21.58 | |||||
| iShares Russell | IWM | 178.29 | 1.91 | 2.25 | 17.34 | |||||
| iShares BIO | IBB | 118.1 | -3.31 | -10 | 12.42 | |||||
| NASDAQ-100 | QQQ | 386.04 | 4.85 | 45 | 35.54 | |||||
| HealthcareSPDR | XLV | 128.25 | -2.09 | -5.59 | 39.34 | |||||
| T.RowePrice | PRHSX | 85.22 | -2.08 | -5.12 | 9.95 | |||||
| iShares MED Dev | IHI | 48.67 | 5.41 | -7.43 | 38.17 | |||||
- REC is summary of analysts recommendations.