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Healthcare and Biotech Stocks: Playbook Update.

Normally the healthcare sector would be a defensive play amidst market uncertainty. But today because of the volatility created by the horrible United Health (UNH) killing and its spillover to social media we have to be a little cautious. On a positive note UNH was up 2.39% yesterday  to $560. The XLV was up 0.29% to $144.70. Given the magnitude of the sell-off in the sector over the past two weeks we would wait before rebalancing your portfolio assuming you have an ample cash position. Here are some ideas  to consider in managing your portfolio:

• Avoid buying general ETFs in the sector as the trends are choppy.
• Buy specific stocks such as biopharmaceuticals you know well and that pay dividends.
• It could be a good time to initiate a mutual fund position in health sciences/medical technology such as Fidelity Medical Technology (FSMEX) and T.Rowe Price Health Sciences (PRHSX).

Keep in mind other crosscurrents at this time of the year and with a New Administration and potential of healthcare policy initiatives in our government. Today’s trading gave a hint of profit taking with all the major averages down about 0.6%. Lately the market has been a bit frothy with the S&P 500 up 27.22% YTD and the QQQ up 27.56% YTD . Many retail investors are having a great year but may be reluctant to take profits for tax reasons whereas hedge funds are not concerned. ThIs could set up for a weak market in January/February.2025.

Here are some notable movers recently among stocks we follow:

BIOPHARMACEUTICALS

• Our top picks have been: ABBV, GILD, LLY, and VRTX. Also consider trades in BMY, PFE and REGN.
• IBB and XBI flatfish but holding upside channel
• ABBV up 13.94% YTD and with news today on Phase 3 Parkinson’s Drug Tavapdon Top Line Results.
• GlaxoSmithKline (GSK) up 4.11% on Multiple Myeloma drug survival benefit.

LIFE SCIENCE TRADES

• Upside Movers : ADPT, CRMD, CYRX, GPCR, ILMN, PACB, QDEL.

This has been a momentum driven market so its hard to say what could happen when the music stops.

We will update any product news from the ASH.

More By This Author:

It’s Been A Tough Month For Healthcare Stocks
Momentum Model For Trading SMID Biotech Stocks: Broad Rally Underway
What To Do After The Worst Week For Healthcare Stocks Since March 2020?