Update-3 11/27…3P EST..Added BridgeBio(BBIO) to momentum trading list at $27 range on technicals and FDA approval of cardiovascular drug, Bought initial shares.
XBI trending toward $100. Movers today from our trading list up>5%: BBIO, CRBU,IMVT, RXRX,TEM.
Update-2…LLY stock rises 4.5% on Biden proposal to cover weight loss drugs; Amgen (AMGN) down 5.7% despite good clinical results on Maritide obesity study.
Large cap biotechs rally: ABBV, GILD,LLY, VRTX.
Update-1…Biotech trades moving up today: ADPT up 18.9%,GH up 8.4%, ILMN up 2.62%, QDEL up 2.54%,RNA up 2.54%,TXG up 6.9%,TWST up 7.4%; large caps holding nicely. XBI up 1.4% to $97 handle. ARKG up 5.16% to $25.06.
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Momentum Model for Trading SMID Biotech Stocks
- Biotech stocks are poised for a recovery in a seasonally strong period through January 2025.
- Small and mid-cap (SMID) have greater momentum for gains assuming inflation remains benign.
- Our model tracks a group of biotechs screen for technology, pipelines, technicals and balance sheet.
Market sentiment remains strong boosted by the Trump agenda and recent pick of Scott Bessent for Treasury Secretary. The bullish thesis remains that the market will rotate into small and mid-cap (SMID) stocks which includes biotech.
We are developing a trading model based upon a criteria that we can eventually quantify, but for now ls based upon technicals and our knowledge of the market and technology. For example, we screened the companies for having adequate financial resources,balance sheet, analyst coverage, management team etc. We can then track news and product milestones to see if the valuation gets a bump up that holds. This model is an ambitious goal which we would transition to an algorithmic model. From the aspect of risk and portfolio management SMID stocks should represent about 10% or less of any healthcare portfolio.
We are past the monthly angst of the latest FED drama and the market seems to believe interest rate risk is down. One more rate cut is expected in December. Biotech stocks do not like rising rates because they are always raising funds. Keep in mind that this list of SMID stocks is highly speculative, volatile and for experienced traders, however we hope to build a portfolio of stocks that are less volatile and have M&A potential. Based on today’s follow-up action you may want to rebalance your SMID cap holdings. An alternative to trading SMID life science stocks is to own a health science fund like FBIOX or PRHSX.
Treasury rates have been declining with the 10 year treasury yieid down to the 4.3% level today. Overall strength of small indices helps with the IWM up 18.96% YTD the IJR up 15.52 % YTD. The ARKG is down 27.37% YTD but the XBI has recovered off the recent bottom around $92 and is in an uptrend to the $98. There are several SMID biotech stocks were good trades recently: EXEL, GH, ROIV, SUPN, VCEL,VCYT etc.
Bounce off recent bottom for XBI and IBB.
Here are some points to consider when trading these stocks:
- ETF correlation is a good place to start. The XBI is an equal weighted biotech fund that gets rebalanced frequently to show the overall strength of the market. If the XBI shows momentum your speculative stock will probably show gains.
- In a bull market like 2021-22 almost all well researched speculative biotech picks with sponsors went up. In today’s more large cap MAG dominant market stock picking is more difficult so better play the long term with a Fund or an ETF.
- Many of these stocks have been good for traders for short term results but our objective is to find the big winner in a burgeoning market like sequencing and immuno-oncology about 7-10 years ago.
- This is NOT a buy list and we will modify it from time to time. Last columns shows stock performance YTD and short term trend. RSI is relative strength. (Source FinVIz and yahoo Finance.)
| %YTD | %MTD | ||||||||||||||||
| COMPANY | Ticker | 11/13 | |||||||||||||||
| P | P | % | P | % | % | MCAP | RSI | Trend | |||||||||
| P 1/20/23 | Initial | 2/4/23 | 12/24/23 | YTD % | 4/8/24 | % | 11/23/24 | YTD | MTD | $B | h | ||||||
| Adaptive BiioTech | ADPT | 4.11 | 5 | 2.6 | -46.94 | 4.69 | -4.29 | 3.08 | 0.69 | 44.2 | – 11/8 | ||||||
| Acumen Therap | ABOS | 5.29 | 3.57 | -33.89 | 3.17 | -17.45 | 2.37 | -38.28 | -12.22 | -0.142 | 41.9 | d 3/1 | |||||
| Avidity Sciences | RNA | new | 7/1/24 | 25 | 43.25 | 378 | -7.41 | 5.16 | 45.62 | – 11/13 | |||||||
| Catalyst Pharma | CPRX | 16.1 | 16.58 | -10.86 | 14.89 | 11.42 | 21.48 | 27.78 | 2.19 | 2.56 | 48.9 | u 11/8 | |||||
| Caribou Biosci | CRBU | 6.29 | 6.17 | -0.175 | 3.71 | -35.25 | 2.02 | -65 | 2.54 | 0.183 | 45.32 | d 2/27 | |||||
| CorMedix | CRMD | 3.9 | 5.31 | 41.22 | 9.96 | 165 | -11 | 0.604 | 44.29 | – 10/28 | |||||||
| Crenetics | CRNX | 42.12 | 18.38 | 56 | 57 | -4 | 5.19 | 47 | – 11/8 | ||||||||
| CRSPR Therap | CRSP | 49.61 | -25 | 55.27 | 63.67 | 56.63 | 53.91 | -13.88 | 47.88 | -23.61 | -1.3 | 4.1 | 48.07 | d 2/27 | |||
| Cryoport | CYRX | 21.75 | -42.34 | 25.24 | 16.09 | -7.26 | 16.38 | 5.75 | 6.56 | -58 | -9.5 | 0.324 | 38.7 | d 4/10 | |||
| Cytokinetics | CYTK | 31 | 65.34 | -21.74 | 49.1 | -41 | -8.78 | 6.24 | 39.46 | d 1/8 | |||||||
| Denali | DNLI | 22 | 19.21 | -9 | 24.69 | 15 | -6.41 | 3.55 | 38.85 | u 11/8 | |||||||
| Exelixis | EXEL | 22.25 | 23.75 | -1.21 | 35.61 | 48.14 | 24..25 | 10.16 | 72.44 | u 11/8 | |||||||
| Evolent Health | EVH | 30.83 | 13.74 | 31.96 | 32.08 | 14.25 | 27.65 | -16.29 | 11.25 | -66 | -51.5 | 1.3 | 21.84 | d 3/6 | |||
| Geron | GERN | 3.19 | 9.24 | 3.22 | 2.29 | -5.37 | 3.79 | 79.62 | 4.07 | 92.9 | 3 | 2.45 | 50.6 | – 8/12 | |||
| Guardent Health | GH | 11/6 | 25 | 32.65 | 20.7 | 56.7 | 4.03 | 74.2 | u 7/30 | ||||||||
| Humacyte | HUMA | new* | 8/1/24 | 8.25 | 4.48 | 58 | -17 | 0/577 | 37.8 | d 7/31 | |||||||
| Ilumina | ILMN | new* | 10/4/24 | 143 | 140/14 | 4.8 | -3.49 | 23.2 | 48 | – 11/5 | |||||||
| Intelllia | NTLA | 25.5 | 14.3 | -53 | -30.8 | 1.456 | 39.75 | d2/28 | |||||||||
| Immatics | IMTX | 9.3 | 9.9 | 13.66 | 10 | -4.94 | 7.59 | -27.9 | -21 | -0.92 | 19.83 | d 3/1 | |||||
| Natera | NTRA | 60 | 91.66 | 46.33 | 167.26 | 167 | 38.8 | 22 | 71.64 | u 11/22 | |||||||
| Pacific Biosci | PACB | 11.29 | 55.68 | 11.58 | 8.59 | 5 | 1.47 | -85 | 1.8 | -81.6 | -2.17 | 0.53 | 44.68 | d 1/5 | |||
| Novavax | NVAX | 3.67 | – | 9.75 | 103 | -19 | 1.6 | 41.69 | – | ||||||||
| Quidel-Ortho | QDEL | new | 9/16/24 | 44 | 40.14 | -45.5 | 0.75 | 2.7 | 51.58 |
d 1/2/24
|
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| Recursion Pharm | RXRX | 10.75 | 8.12 | -17.65 | 5.7 | -42 | -15.68 | 2.2 | 36.56 | d 2/27 | |||||||
| Rezolute | RZLT | new | 7/8/24 | 4.25 | 5.78 | 394 | 0.41 | 0.284 | 41.19 | u 11/8 | |||||||
| Roivant | ROIV | 11.4 | 11.03 | -1.78 | 12.53 | 11.58 | 7.83 | 9.1 | 64.96 | u 11/22 | |||||||
| Supernus | SUPN | 40.3 | 12.3 | 41.61 | 29.23 | -18.05 | 30.07 | 3.9 | 36.22 | 25.16 | 1.12 | 1.87 | 56.73 | u 11/13 | |||
| Tempest AI | TEM | new | 7/10/24 | 52 | 58.6 | 46.5 | 20.38 | 9.22 | 53.38 | u 11/12 | |||||||
| Twist Biosci | TWST | 18 | 3.76 | 34.03 | 31.54 | -14.53 | 42.23 | 14.7 | -6.88 | 2.5 | 8.97 | – 7/22 | |||||
| 10x Genomics | TXG | 47.84 | 56.58 | 55.27 | 27.59 | -50.79 | 14.3 | -74.4 | -6.9 | 1.73 | 40.99 | d 1/8 | |||||
| Vericel | VCEL | 31 | 34.75 | 31.93 | 46.05 | 29.32 | 59.11 | 66 | 43.5 | 2.9 | 73.99 | u 11.22 | |||||
| Veracyte | VCYT | 24.89 | 39.43 | 26.67 | 28.27 | 19.13 | 39.6 | -29.81 | 39.6 | 43.1 | 19.5 | 3.06 | 63.29 | u 11/22 | |||
| Wave Life Sci | WVE | new | 10/26 | 14.45 | 14.3 | 183 | -6.56 | 2.24 | 54.33 | u 11/12 | |||||||
| SPDR Biotech | XBI | 86.99 | 14.75 | 90.39 | 87.62 | 5.57 | 83.49 | -6.51 | 96.24 | 7.8 | -1.95 | 6.17 | u | ||||
| iShares BIO | IBB | 133.77 | -1.89 | 132.51 | -2.48 | 137.96 | 1.65 | -4.19 | 42.2 | u | |||||||
| HealthcareSPDR | XLV | 135.02 | – | 143.22 | 5.02 | 144.16 | 11.82 | -4.74 | 39 | – | |||||||
| iShares MedTEch | IHI | 53.65 | 57.3 | 6.17 | 55.79 | 60.35 | 11.82 | 1.04 | 58.83 | u | |||||||
| ArkGenomics | ARKG | 35.28 | 32.81 | 16.22 | 23.18 | -29.35 | 23.83 | -27.37 | -2.18 | 46.78 | d | ||||||
| T.RowePrice | PRHSX | 86.84 | -3.32 | 92.49 | 5.22 | 94.43 | 7.43 | -4.79 | |||||||||
| FidoSelBiotech | FBIOX | 1763 | 20.42 | 14.53 | -5.59 | ||||||||||||
| FIdoMedTech | FSMEX | 61.77 | 64.23 | 68.03 | 9.8 | 0.74 | |||||||||||
| JANUS Life Sci | JNGLX | 76.02 | 9.97 | -4.96 | |||||||||||||
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