The sector has gapped above the range with merger Monday. Interestingly the last gap we saw in the XBI (JPM week) saw a gap and run instead of a test of the gap. While it is not impossible to see a similar gap and run in this case, we are already hitting what could be […]
February 21 Biotech Update
Resistance is acting like resistance. It looked early that we might be peaking above it but clearly that is not the case. These sort of false breakouts (and breakdowns) are killers in range bound markets as it can get one to trade too early. My mantra in these scenarios is that the sector will be […]
February 19 Biotech Update
The sector might be peaking its head above the top end of the range. The ideal set up for breakout are moves above the range and then successfully testing the upper end of the previous range where it would now act as support instead of resistance. At this point, we look to be moving out […]
February 15th Biotech Update
Not surprisingly we are in a post earnings lull. While there are still earnings being posted, the bulk of the major ones have been reported. We are also seeing the expected uptick in secondaries, which is later than usual as a result of the government shutdown. In any case, there is nothing particularly sector moving […]
February 13th Biotech Update
The sector continues to do well this week on not necessarily all positive news. My refrain will continue to be that we are range bound until proven otherwise and so it should not surprise anyone that is still my position. 1. On the positive side, EXEL announced pretty strong numbers and one could argue that […]
February 12 Biotech Update
We have some interesting news today (positive and negative) with some interesting read through. I still think the base case is that the sector is in a range until proven otherwise and there is nothing in the price action to indicate anything different. 1. The biggest news is obviously the GILD miss on NASH. This […]
February 7 Biotech Update
We start off a little weak this morning, which is not completely unexpected given that we are at the top end of the recent range. Obviously it would be nice to see a breakout above the range to start another leg higher but range bound trading after the recent run is not bad at this […]
February 6 Biotech Update
The sector faded yesterday and seems to be in a little range between $80 and $86. This is not necessarily a bad thing after the big bounce we had. Sitting in this range resetting the chart and building a base of support is not bad for the longer term. It is certainly better than charging […]
February 5 Biotech Update
There might be reason for optimism in the sector. The XBI seems to be breaking above its recent range and the $80 level might have been support for this new move. That would certainly be the best case scenario as it would be a higher low ($80) and one that is a little higher than […]
February 1st Biotech Update
The sector seems to have gotten its footing in a way I was not expecting. Perhaps there is a bigger underlying bid than I thought. Perhaps the dovish turn in the Fed has put risk on again. In either case, it looks like $80 on the XBI acted as support and now the question is […]
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 […]
