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Why Biotech Stocks Just Got Smashed

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Did you see the Biotech sector get smashed today, with the Nasdaq Biotech ETF ($IBB) and the SPDR Biotech ETF ($XBI), down by about 1.5 percent and 2 percent? What was that? Just look at the graph below, with Exact Sciences ($EXAS), down by nearly 13 percent, Exelixis ($EXEL) down by over 7 percent, and Amicus ($FOLD) down by more than 6 percent. Just smashed!

It comes down to this, with the JP Morgan Healthcare conference ongoing, companies are pre-releasing quarterly results and outlooks for 2018, and to this point, some of the results have not been inspiring, and when you are a hyper-growth company, inline just doesn’t cut it. 

Data compiled by Ycharts

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NASDAQ Biotech ETF

So what just happened? The NASDAQ Biotech ETF had been up about 8 percent since November 15, so today’s pullback appears on the surface to just be that. The trend in the ETF is still higher, and the area of support is still between $106.50 and $107, and to this point, it has not even come close to being in play. So we will continue to watch.

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Exact Sciences

Exact Sciences disappointed reporting the number of Cologuard test complete in 2017 at merely the upper end of guidance, not the monster beat the street was looking for.

EXAS Price data by YCharts

Exelixis

Exelixis shares got smashed, but technically the stock still looks solid here. The uptrend remains in place, and today’s pullback happened on reasonably light volume compared to historical measures. That said, a fall to the trend around $26.50 to $27 seems possible.

Amicus

Amicus fell hard today after providing its full-year 2018 outlook. Unfortunately, from a fundamental standpoint, I do not know much about this stock, as it is relatively new to me. But Adam Feuerstein tweeted “no definitive update yet on regulatory path for Pompe disease drug.”

Like $EXEL, $FOLD looks ok on the chart from a longer-term trend side. There is undoubtedly further risk lower in this stock perhaps to around $12.50 to $13, but overall the chart is far from broken at this time.

Neurocrine ($NBIX) fell hard as well, by nearly 5 percent, after the company also gave a preliminary look at its fourth quarter, coming in-line with analysts estimates at $94 million. But again, the stock has had significant gains, and in-line isn’t always good enough.

So do I need to say more about why the sector was down hard today? Lots of looks going forward into 2018 at the JP Morgan conference and just not much to get excited about, at least after day 1.

Ok enough with Biotech.

Tesla

Did you see Tesla’s wild ride higher today by nearly $20, back to over $330? The stock just continues to be a wild, and in my premium video today I go through a couple of the reasons why the stock may be able to keep riding higher even though Model 3 news was so terrible.

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On-Demand Content

Apple iPhone Shipment Maybe Better Than Feared

Why Biotech May Outperform In 2018 

Thinking About 2018

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Nvidia

Mighty Nvidia, why do I continue to doubt thee. Nvidia just continues to rip and had a massive breakout today. Is there any stopping the stock, which has been on a tear now for over two years? To this point the only thing that can stop Nvidia it seems is itself. How wrong I have been so far. I can list a million reason why the stock is overvalued, but then again I could do the same thing for Tesla, so the market speaks, and today’s breakout, at least over the short-term is enormous.

That’s it!

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Michael Kramer and the Clients of Mott Capital own shares of TSLA

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Tags: #biotech #exelixis #nvidia #tesla #neurocrine #amicus #IBB #XBI