UPDATE-1 JY7 Biotech rally intact. The rally from the June 15 bottom and breakthrough technicals on June 23 is confirmed. Biotechs were so beaten down with valuations at cash levels. Our new picks among smaller cap biotechs have done well this week. We will summarize at the end of the week.MRTX had one downgrade and CCXI is a laggard. The QQQs are also in an up- trend over 5 days to $295.

Healthcare Stocks Pivot To Biotechs

  • Healthcare stocks have been a safe play as the “macro” creates uncertainty and risk of recession.
  • Biggest concern for all stocks remains PE compression and a market reset after Q2 earnings and guidance.
  • Contrarian thesis is that small cap biotechs with good pipelines and balance sheets are at VC levels and good trades.

Over the past week we have seen small cap biotech stocks climb up from their recent bottom . One positive indicator we have is the XBI with good technicals  moving from  a June 17 bottom at around $64 to a $80.60 close today.  Another bullish move was the FBT from $125 on June 16 to $141.26 today. Ok this is great for traders but does the rally have legs for the longer term? Meanwhile the XLV is stuck in a range at their SMA20-50 level about $129, off the double tops of 2022.

Our investment strategy throughout the turmoil of 2022 has been to favor large cap biopharmaceutical stocks and underweight small caps many of which are down 40% in 2022. Our favorite stock over the past 2 years has been United Health (UNH) which sold off today down 2.34% to $505.24 off early 2022 highs of $540 in mid April. So will  this rotation trade seemingly out of the safety zone of large caps into speculative biotech continue? Most of these picks are less sensitive to earnings because they trade on core technology and innovation.

Here are our favorite focus small and mid cap biotech stocks and performance over one month. We also made good trades in AGEN and ROIV both from lows All focus stocks are off their 12 mo. highs. and were mentioned in our previous posts:

ChemoCentryx (CCXI) up 8.48% at $26.85.

CRSPR Therapeutics (CRSP) up 9.95% at $70.60.

Cryoport (CYRX) up 34.59% at $33.97.

Evolent Health(EVH) up 7.27% at $32.16

Mirati Therapeutics (MRTX) up 62% at $72.

Moderna (MRNA) up13.4% at $155.54.

Quidel/Ortho (QDEL) up 11.64% at $100.41.

Veracyte (VCYT) up 36.475 at $23.41

We suggest you create a portfolio in Seeking Alphabet with these stocks to track the news and performance. We will detail these focus stocks in a matrix.

 

 

 

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