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Biotech Stocks Continue To Rip Higher As Breakout Nears
What a big difference a few days can make, right? It was just Tuesday when everyone was trying to figure why Biotech stocks were tanking. Today you have the NASDAQ Biotech ETF IBB ($IBB) nearing a breakout, which could send the shares surging higher to about to $122, a rise of 9 percent. What gives?
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What gives is that Monday’s episode, as I wrote, was a pullback nothing more, nothing less. It was just enough to remind everybody that the group can get wild at times. The ETF continues to grind higher, and I think it is approaching a breakout. Should the ETF rise above $114 it should get us there.
The table below I find super interesting because it is the past one-year performance for the ETF holdings. The returns of Nektar ($NKTR) and Sage ($SAGE) are pretty impressive. But I want to pay attention to the bottom five stocks. Do you notice anything they all have in common?
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Baker Stocks
Well, Incyte ($INCY), Seattle Genetics ($SGEN), and Alexion ($ALXN) are all Baker Brother, a large biotech Hedge Fund, holdings. But they are not any holdings within the portfolio, they are numbers 1,2, and 3 holdings, 4 is not on the list, but it is Acadia Pharmaceuticals ($ACAD), and 5 BioMarin ($BMRN). Look at the performance over the past year. They have been crushed by the IBB ETF, which is up 21 percent. Amazing.
Does it mean anything? Probably not? Maybe just bad luck I guess? I to this point haven’t been able to find a correlation that would suggest otherwise.
Seattle Genetics
Seattle Genetics appears to be trying to form an uptrend, while holdings support around $51.50. The stock has developed what seems to a bullish symmetrical triangle.
Acadia
Acadia shares have been range-bound for what feels like years; one can see a triangle has formed, which could be viewed as a bullish signal.
Incyte
Incyte shares are desperately trying to form a bottom at $93. A break below $93 pushes it lower towards $80.
Alexion
Alexion, like Acadia and Seattle Genetics, is also in the middle of a bullish symmetrical triangle as well.
BioMarin
Meanwhile, shares of BioMarin have gone nowhere, and look like they may continue to be range bound.
Until Tomorrow!
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Michael Kramer and the Clients of Mott Capital own shares of ACAD
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
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Tags: #biotech #alexion #acadia #seattle #genetics #nektar #sage #incyte