January 30 Biotech Update

Another day and another weak earning for biotech. This was fairly predictable and the real question is how far these earnings (and the upcoming slew of secondaries now that the government is open) will push the sector. The higher this pullback bottoms the strong the signal, whereas getting anywhere near the previous low would be […]

January 29 Biotech Update

An interesting start to large cap earnings. The sector was weak yesterday and this could be the long awaited pullback (or another head fake). Ideally, the pullback bottoms out in the $73-$75 range on the XBI to form a higher low. While a retest of the recent low around $64 is not impossible it would […]

January 25 Biotech Update

Another day and another lackluster pharma earnings. In some sense, it is good to see this have limited impact on the sector but on the other hand this is certainly not a bullish fundamental situation to see growth slowing in pharma. Clearly next week will be more important as we get into the large cap […]

January 24 Biotech Update

Another day and another chance to grind away at these levels. Yesterday was pretty weak and it will be interesting to see how the sector reacts. If we have an inside day, then perhaps the near term trend remains the grind but if we break below yesterday’s low then it is another sign that the […]

January 23 Biotech Update

A short note today as there is not much going on. We have earnings starting next week so the pace of news should pick up but at this point, I suspect the sector more or less trades in line with the broader markets until we get more company and sector specific news. 1. JNJ hurt […]

January 22 Biotech Update

Certainly not the best start to the week but it remains early. As long as the XBI remains above $80 I would not worry too much about this being the long awaited correction but this is certainly price action that one needs to watch. I think today offers the strongest test of the recent move […]

Celgene Update

Real quick post on CELG. I sold my position for $86.28. I wanted to lock in profits and while there is still a nice gap between current price and deal price, I do not want to risk the profits. BMY call options have been hot to end the week and there is a risk that […]

January 17 Biotech Update

The grind in place or higher option remains possible with the market. It will be interesting to see how the approach of earning season pressures traders. Does the lack of a correction before earning season pressure traders to chase or does it lead traders to take some risk of the table to avoid losing their […]

January 15 Biotech Update

We are clearly not out of the woods for a correction but we should also remember that corrections can occur through price or time. In other words, most think of a correction as a retracement of a move higher and while that is most common, it can also occur through time where prices grind in […]

January 11 Biotech Update

Everyone continues to expect a pullback and yesterday looked like it would be the day that starts the correction but we ended up green again. This has been on the of the strongest JPM weeks I remember (at least from a price action perspective). Yesterday is another brick in the wall of the idea that […]

January 9 Biotech Update

The sector move seems to be losing some steam. This is not unexpected nor bad as these overbought conditions need to be reset. The real key going forward is not how much further this move can stretch higher but whether or not we can form a lower high. That will be absolutely key as a […]

January 8 Biotech Update

The sector is ripping higher the past couple days, which makes sense given the news flow. I thought the XBI could hit $80 and it did. This is an area of some resistance and the question is whether or not this momentum could actually carry it to the $85 area. Over the near term I […]

January 7 Biotech Update

This is one hell of a start for biotechs this year. M&A and good data are back. Of course, there is a bias in JPM week to present good news early, so I would be surprised to see this rate of positive news to continue all week but this is certainly a great start and […]

January 4 Biotech Update

The broader market is finally supportive of the sector and barring a reversal we should start to see a nice run up into JPM next week. At the very least I can see the XBI making it to $74 with a decent chance it break that next week and retests the $80 level. An inability […]

January 3 Biotech Update

Holy crap, BMY is buying CELG. This is one hell of a way to start the XLRN is aNew Year and JPM week. It is unfortunate for the sector that the broader markets are so weak otherwise this would likely have had a bigger positive impact. Hopefully the AAPL related weakness is fleeting and we […]

December 31 Biotech Update

The selling has been relentless but we are now seeing a nice rally/dead cat bounce. While one has to be very careful with any rally as countertrend rallies in bear markets can be face ripping, there are some nice signs for the biotech sector. While there is some reason for optimism one still has to […]

December 18 Biotech Update

It is brutal out there for bears and bulls alike. While the trend seems to be lower the market continues to have little rips higher. I still lean towards another leg lower and the XBI is sitting right above the recent lows and a break below those levels starts the waterfall down to another low. […]

December 17 Biotech Update

It really is looking like we are entering a bear market and those sharp rallies that we have seen are simply the sharp counter trend rallies one sees in bear markets. I am not completely convinced that a bear market is coming but I think we are close. As long as the economy remains out […]

December 13 Biotech Update

Not a ton of news as the year closes down. It seems like the market wants to whiplash investors as we bounce around with no clear trends. It does not matter how strong or weak a day is as it seems to have no impact on trading the next day. We should be approaching a […]