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 […]

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 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 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 […]

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 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 […]

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 6 Biotech Update

China is back in the news and for good or ill, the sector fundamentals do not matter. Right now it is all about China and the broader market will pull the sector higher or lower. At this point with no trade deal and with the arrest of the Huawei CFO (the daughter of the CEO […]

November 29 Biotech Update

We are at an interesting place for the sector. The XBI is approaching the upper end of the downtrend, which has been acting as resistance. I am not totally convinced that will be the case this time as the recent move lower did not form a lower low. That hints that we could be leaving […]

October23 Biotech Update

It is unfortunate that the earnings weeks comes as the market seems to want to collapse. Industrial earnings are finally seeing the impact of the trade policies and now apparently it is a biotech issue. It is hard to see how the sector would avoid being pulled into a larger market sell-off regardless of the […]

October 22 Biotech Update

This should not be week of no news as we have the ESMO data to digest as well as a number of large cap earnings to work through. Unless there is some massive move in the market, it is hard to imagine that the sector does not trade on the news as opposed to following […]

October 12 Biotech Update

Not a lot in terms of news but certainly in terms of action. The selloff has been brutal but I think we are much closer to a bottom than many think. My question is not whether we get a nice short covering rally soon (I expect we do) but what happens after the shorts cover? […]