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Risk Off: Take Profits In Biotech Stocks

|Includes:FBT, SPDR Biotech ETF (XBI)

Bad Tape Yesterday (7/7) Calls For Raising Cash

NASDAQ at 4451 up 6.58% YTD

  • Major ETFs and Fidelity (MUTF:FBIOX) take a ~3% hit
  • All major market sectors weak with healthcare down 1%
  • Unusual weakness in many Rayno Life Science stocks
  • Small caps weak with IWM down 1.69%, up 2% YTD
  • Many former high fliers continued weak: CLDX, ICPT,INCY, NLNK, SGMO, SRPT

The market failed in a run to new highs as it approached within 10% of February peaks. Some of our focus stocks bucked the trend like Pharmacyclics (NASDAQ:PCYC) up 2.79 % bouncing off the 2014 support level near $90. The Company was granted priority review for the Imbruvica sNDA last month. Qiagen (NASDAQ:QGEN) and Regeneron (NASDAQ:REGN) were also stable. Large cap biopharmaceutical stocks were down as much as 2%. Summer trading is likely to be choppy so going into the fourth quarter with 10-20% cash is a good idea. Moreover Q2 financial results will give us visibility for large cap stocks.

Some candidates for profit taking within the Rayno Life Science Portfolios with YTD performance: Exact Sciences (NASDAQ:EXAS) up 42%, Illumina ILMN up 61%, Regeneron (REGN) up 13.2%, Sequenom (NASDAQ:SQNM) up 64% and Vertex (NASDAQ:VRTX) up 30.3%.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Long Fidelity Select Biotech Fund (FBIOX)

Stocks: XBI, FBT