This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary and join the 1,756 subscribers getting it for FREE every day!
Biotech Stocks May Have Finally Been Unleashed
Michael Kramer and the Clients of Mott Capital Own CELG
Stocks continued to move higher, led by the Biotech’s, which were up by about 3 percent. There’s something we haven’t said in a long time. The highly anticipated speech regarding drug prices by the President didn’t seem to be as bad as many had feared. Increasing competition, deregulation, cutting out the middlemen, is at the core of the proposals, based on my interpretation.
The drug pricing overhang had plagued this sector since September 2015, when Hillary Clinton made it a political point in the race for President. If this is the worst of it, I think the group might have much further to rise. Companies like Celgene, Gilead, Biogen, and Amgen are all trading at some of their lowest earnings multiples in years. Albeit for good reasons in some cases, but some of the valuations seem excessively low.
The details aren’t fully known yet, and what ends up getting put into law may be very different. But just knowing the blueprint for how they plan to tackle drug pricing might unleash the sector from the shackles of the past three years.
I think the group is likely heading higher.
The S&P 500 continues to rally, and finished near the highs at 2727, up about 2.5 percent. The setup continues to look strong.
Technology stocks continue to look strong as well and so do consumer stocks, even though Amazon still didn’t break out. $1620 is proving, for now, to be tough for Amazon. Now that I’m calling for it to rise, it will probably go down! Ugh. We shall see.
I’m surprised Nvidia was down today. But I also do not think today’s price actions mean the stock is going lower. Shares held firmly above support around $253. The results were stunning, and this probably keeps working higher.
Amgen shares continue to look strong as well, with a well-defined double bottom, and what looks like a solid path towards $178 to $180 range.
Gilead also looks as if it could see a rise to about $72.
Biogen also looks like it is on the cusp of a big breakout.
That is going to be it for today.
Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets
Free Articles Written By Mike:
Join our 1,756 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe
Photo credit via Flickr
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.
© 2018 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Tags: #biotech #amgen #gilead #biogen #technology #amazon #sp500