Biotech (IBB) 2015 Triple Top Is Here! Nasdaq Hits New High

Nasdaq Composite hits all-time high at 5106 - up 7.8% YTD. Biotechs lead, up 21% YTD;  IBB, at $367, at high for year; triple top for 2015.

The Nasdaq market recovered today after a one-day slump caused by concerns about a strong dollar. Also economic concerns were on the minds of many investors yesterday with weak corporate profits, slowing demand for big ticket manufactured goods and sagging retail spending. And a Fed rate increase is always in the background of the market. Today stocks abruptly reversed, catalyzed by an AVGO/BRCM deal in the semiconductor space that boosted both stocks. Analysts look for more SEMI Deals believing slow growth and tough competition is causing consolidation. More semiconductor deals lie ahead. The SMH was up 3.73% today and all semiconductor stocks we track are solid green.

Rayno Portfolio stocks were also solid green with only two small losers. Big winners were: AbbVie (ABBV) up 1.94% with closing of Pharmacyclics deal, Biogen (BIIB) up 2.56%, Exact Sciences (EXAS) up 2.86%, Gilead (GILD) up 2.45%, Illumina (ILMN) up 2.1% and Vertex (VRTX) up 4.22%. We added Array BioPharma (ARRY) today as a trade at the $7.70 handle. We believe the stock is undervalued with six Phase 3 studies in oncology, multiple myeloma and asthma. The Company has a broad range of partners including Roche (RHHBF) and Celgene (CELG).

Biotech stocks continue on a volatile but upward one month trajectory supported by M&A for the long term, good clinical data with high expectations from ASCO and deep pockets of speculative cash courtesy of the Fed. It is likely we will pierce the triple top next week Three leading biotech ETFs (FBT, IBB, XBI) because Momentum rules for now. Then look for a rest as valuations and frothiness become a concern. The Gene therapy and CAR-T Stocks are overextended with multi-$$B valuations and limited Phase 2 clinical data. However most of these stocks are 90% owned by institutions who support the valuations. A case in point is bluebird bio (BLUE) up 80% YTD. JUNO and KITE  were also high fliers early in the year and came back to earth and are now down YTD.

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