The sector has been struggling to say the least and when last I wrote, it was not clear to me the underlying cause, it is clear now (I will discuss below). We are obviously oversold in the short term and while we should bounce and recover as there is little fundamentally wrong with the sector, […]
April 17 Biotech Update
The trend in the sector is moving onto more and more shaky ground. Breaking below $86.22 on the XBI (the most recent low) would end the streak of higher highs and higher lows. We still have some room but even at these levels (if we reverse) it looks like the trend is not quite as […]
April 16 Biotech Update
It was not the ideal start to the week but also not the worst. The selling from the morning opening was bad but we may have bottomed in the afternoon as there was a minor late day run. I would use yesterday’s intraday low as a key level and would get less constructive on the […]
April 15 Biotech Update
Certainly an interesting start to the week. In terms of the broader sector, I suspect that we have a positive week as we are in the area where a bounce would be expected with the current trend. If we continue to have underperformance and a negative week, then we need to start thinking more about […]
April 12 Biotech Update
The sector is certainly underperforming the broader markets and while that is frustrating, I do not see anything that is concerning. We did not get the breakout but if we bottom around $90, then we have set up another higher low. For me to really change my view, I would need to see the XBI […]
April 9 Biotech Update
A pretty slow start to the week. The sector underperformed yesterday and is red today but doing a little better than the broader market. We are at an interesting spot. It is not clear whether we broke through the upper end of a range last week or whether we have hit resistance and will reverse […]
April 5 Biotech Update
Really not much happening in the sector, so I will keep this relatively quick. I think if we can close above $93 on the XBI it bodes well for next week but it would take a nice move today. I do not think we are anywhere close to breaking down so either we have a […]
April 3 Biotech Update
The XBI is breaking above the top end of the narrowing range, which is a strong signal of an upside breakout but it needs to build off of this move. A little break followed by churning and/or closing the day under the breakout level is not great. All that being said the table is being […]
April 2nd Biotech Update
The sector seems to be setting up for a breakout(down). Since the gap higher in late February, it looks like we are getting higher lows and lower highs. The range is narrowing and we should soon be breaking out of the narrowing range and that is going to generate the next significant move. I still […]
March 28 Biotech Update
Yesterday was not a great day for the sector but we seem to be bouncing back today. It appears that the next move will not be easy in that this churn and volatility is going to be difficult to play. I still think we go with the trend (which is higher) and ignore the near […]
March 27 Biotech Update
Yesterday was a nice little rally in the sector, which given the sharp pullback was not completely unexpected. The more interesting question is whether that rally can be built upon over the next couple days. The sentiment from Friday and Monday was so negative that many are likely expecting more selling. That is certainly possible […]
March 26 Biotech Update
The sector has had a nice sharp pullback that has challenged sentiment a little. I was a little surprised about how quickly sentiment got negative yesterday as we have had a pretty solid move higher. It seems that sentiment is a little more fragile under the surface than I thought. In some ways that is […]
March 21 Biotech Update
This will certainly be a bad day for the large cap but I would not be surprised to see the XBI outperform if not eventually turn green as M&A fever hits the space. The BIIB failure is large and important for a number of reasons, which I will go through today. 1. While many did […]
March 14 (Pi day) biotech update
A nice late day rally yesterday was a good sign. That was what I was waiting for after a morning of listless direction. It is looking more and more likely that the sector wants to test the recent high in the mid $93s in relative short order. Given the strength it would not stun me […]
March 13 Biotech Update
Yesterday was a good day for the sector and we are right back to what could be some resistance on the XBI at $90. There was some good news coming out that sort of stoked the move and it will be interesting to see if we pause today or extend. Clearly we are pausing in […]
March 12 Biotech Update
I am finally back and the sector appears to have pulled back a little. I do not see this a particularly bad pull back as it looks to have closed a gap and bounced off of it. In my mind, it appears to be setting up as a successful test of the recent breakout assuming […]
February 26 Biotech Update
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 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 […]
