Looks like we are going to move from good to bad with earnings warnings likely to weigh on the sector today. I think there was always some concern about earnings heading into the upcoming reports and this has only been exacerbated today. 1. In terms of the earnings warnings that came out (ILMN and HZNP), […]
October 3 Biotech Update
Not the best start to the week for the market or sector but there really seems to be little conviction on this move. So we meander lower and the sector moves with the broader market. I think the market it getting closer to its next big move as we are closing in on four months […]
September 27 Biotech Update
We got some interesting biotech news and I thought there would be only one to talk about but we have three I want to touch on so I will save general market commentary for another day as nothing has changed there. 1. The first news is the interim ZUMA-1 data that was reported by KITE. […]
September 26 Biotech Update
Nothing really to move the sector to start the week, so it looks like we sell off with the rest of the market. This price action does not change my thesis that the sector’s path of least resistance is higher for the rest of the year but given the run we do likely need news […]
September 23 Biotech Update
The sector seems to be quieting down a little and perhaps a little bit of consolidation of the recent move is in the cards. All in all, however, it seems like a productive week for the sector and confirms my base case that the likely path moving forward is higher (with the obvious pullbacks sprinkle […]
September 21 Biotech Update
The sector is certainly heating up and we still seem to be at the point where good news is rewarded and bad news is creating isolated damage. Not only do we have the tailwinds that I have been talking about but last week hedge funds were underweight the sector and continuing to sell. Every day […]
September 20 Biotech Update
A little but more news today and there are actually some interesting implications. Yesterday was actually not great in terms of trading given the weakening towards the end of the day but with more positive news today we should see the rally continue. Again, if it struggles on the back of positive news yesterday and […]
September 19 Biotech Update
Another slow news start to the week. Without anything positive or negative to drive trading, I suspect we generally move with the market with perhaps some modest outperformance. The trend for the sector has been positive and there is nothing since Friday that should change that underlying tailwind. {Note that is what I wrote before […]
September 14 Biotech Update
The market seems to reversing from the decline yesterday, although not to the same extent of the selloff. This is odd trading in terms of these large swings on little news but it does appear that the sector continues to outperform the market (perhaps more so in the up days than in the down days). […]
September 9 Biotech Update
Not a good day today (seems like rising rates freak out). I may not have been paying very close attention to the market but this seems like a drop on no meaningful market data or information (market tends to throw periodic fits when they increase the odds of a rate hike). The broader market seems […]
August 22 Biotech Update
The sector is doing well on the consummation of the long courtship of MDVN. I will be back with my commentary this week but am still not quite back to the usual routine. The kids still do not have school, so these will be shorter than usual this week but next week when everything is […]
August 2 Biotech Update
Not surprisingly we are having a consolidation/pullback. The sector has been on a tear and nothing goes straight higher. While the past 12 months or so has trained us to look worriedly at each pullback, this has the potential to be different. We appeared to be breaking out of a range and if the sector […]
July 29 Biotech Update
The news is slowing down a little this week but the earnings continue for the large caps. So far as a group the earnings look good indicating solid fundamentals with the companies. The stocks have been reacting well and the sector has been moving higher and outperforming. This move higher raises the bar for the […]
July 28 Biotech Update
It is a mixed bag today in terms of stock reactions but the actual numbers continue to be good. I am not exactly sure why some stocks are reacting better than others but I will take a stab at it. In any case, it is hard to argue that the fundamentals of the sector do […]
July 26 Biotech Update
We got a double barrel of bad news after the close last night but I must say the overall sector reaction is good. I have said this before but it bears repeating. If this had happened a couple months ago the sector would be down 5%+ and stay down. Today we are green. It seems […]
July 25 Biotech Update
It is a slow start to what will end up being a very busy week of large cap earnings. We have a large cap reporting every day and it will be started with GILD after the bell. We have had good price action so far that has correlated with a strong set of earnings. Of […]
July 22 Biotech Update
Not a lot of additional news today. The sector continues to modestly outperform the broad market, which is good. The XBI crossed over the 200 day moving average (and actually closed above it) and the longer it can remain there the better. It would be great to see that moving average tested and hold as […]
Dave-Trading – July Edition – Unveiling the “whipped cream” strategy
*** David Sobek is a disciplined value investor. Using models, research, and fundamental data, David devises a value for biotech stocks, buys when significantly undervalued, and sells when significantly overvalued.*** As a reminder, this is my personal guide. You can alter it in accordance with your risk tolerance. >3 Standard deviations – No position 2-3 […]
July 19 Biotech Update
More of the same yesterday and still not a ton of news for this morning. The market is overbought even if the sector is still not anywhere near over bought or all-time highs. That makes one worry a little about what happens to the sector when the market inevitably works off the overbought condition but […]
July 14 Biotech Update
The market continues to ramp higher but about halfway through yesterday the bottom fell out of the biotech sector and it has been struggling ever since despite the strength in the broader markets. It is not immediately clear what was the cause (seems temporally to correlate with Andrew Left noting that he is short VRX […]
