Fund.TBD
Swing Trader, Technical/Fundamental Analysis
Healthcare looks attractive as volatility has eased in recent weeks while inflows stay steady. Merck is the best-looking pharma play, pharma and biotech are favored, and the broad healthcare sector covers all the bases. x.comÂ
Small- and mid-cap biotech looks like one of healthcare's more asymmetric setups after a four-year bear market, as AI speeds drug discovery and Big Pharma faces a patent cliff. Over $300B of pharma revenue goes off patent in the next few years, M&A is already ramping hard as pharma hunts for assets, and many small and mid-cap names still trade at reasonable valuations, making them potential takeover targets. x.comÂ
Fintech is investing while biotech is gambling: roughly 90% of biotechs fail versus 10% of fintechs. Most fintechs are growing 25-30% or more yet trade at record-low valuations, while biotech is already up 90% and in a bubble driven by buyout mania. x.comÂ
Biotech's usual Q4 strength ahead of JPM season makes aggressive rallies in smaller names highly likely. ARKG is starting to break out, and PDS Biotechnology is showing multiple buy signals. If ARKG keeps running as expected, Nautilus Biotechnology, PDS Biotechnology and Quantum-Si could reasonably rally toward about $10 soon; broken chart structures would invalidate that view. x.com x.comÂ
Biotech looks like a sector that wants to trend higher. Biotech M&A drove a heavy-volume weekly move to the top of a multi-month range; it just needs some help from the macro environment. x.comÂ
Biotech looks vulnerable relative to pharma if higher oil keeps rates higher for longer. United Airlines' CEO plans around $175 oil by the end of next year, Qatar expects five years to restore lost gas capacity, and one-year forward oil near $76 versus $98 spot may underprice the long recovery. Biotech is highly rate-sensitive and pharma much less so, yet pharma fell twice as much this month; that could reverse, with biotech hit as a risk asset while pharma falls less or even rises. x.comÂ
Biotech, including Thermo Fisher, Eli Lilly, Intellia, CRISPR, Illumina and NeoGenomics, stands to gain as AI-trade capital rotates out of infrastructure, since healthcare is the largest market AI has yet to disrupt. AI hardware is worth about $14 trillion versus $1.4 trillion for biotech, so a 2.5% rotation could, at 5x inelasticity, put $1.75 trillion of pressure on biotech. Capital isn't leaving the AI trade; the equal-weighted S&P 500 is at all-time highs. x.com x.comÂ
Biotech stocks are breaking out of a five-year range because the threat from oil and interest rates was priced in years ago. Many of the most undervalued growth stocks are now in biotech, and research discovery is getting a boost from AI, making it perhaps the sector with most to gain from AI productivity. Charts support it: daily volume spikes have tended to mark major bottoms, the weekly held its quarterly averages to form a base, and the monthly shows a healthy pullback to the one-year EMA. … Show more
Biotech looks weak as rates finally appear to be weighing on the sector. The biotech ETF closed red well below its 50-day moving average, its 100-day is below its 150-day, and the chart is messy. x.comÂ
Healthcare and biotech baskets like ARK Genomic Revolution ETF are tricky to short because they behave like baskets of options: one or two winners can return the whole fund, and AI makes it much more likely that a few succeed. @LongVollllll sees an asymmetric short, arguing holdings are 50-100% overvalued, burn cash as rates break out and rallied on unrelated Moderna news. x.comÂ