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Did we say Tech … we meant Biotech. Tech is where it’s at, but Biotech has taken the spotlight recently. Even Amgen (AMGN – 336), the poster child for a long-term trading range, is back to the top of its range. Most Biotechs are NASDAQ-traded, so won’t help the NYSE Advance/Decline numbers, but expanded participation wherever is a good thing. And, in the database we use there are more than 500 Biotechs. Meanwhile, there is strength generally in healthcare, Lilly (LLY – 1,023) leading the way. This is another broad group, in this case a help to NYSE breadth numbers. It also seems noteworthy that some of the Financials have helped keep things together, notably Dow Jones components J.P. Morgan (JPM – 309) and Goldman Sachs (GS – 806). For Tech, it seems a bit of a breather, as they like to say.
There are many ways to play Tech from the seven stocks that comprise the MAGS ETF (MAGS – 65), to the 500 or so that comprise the S&P – the latter, being a telling commentary on the extent of Tech’s influence. When it comes to individual names, for the MAG 7 it’s a bit of a movable feast. Not so long ago META (610) looked best, now we would say Apple (AAPL – 273), Amazon (AMZN – 238) and Google (GOOG – 279), not to forget the sort of sleeper AI, IBM (305). As for Biotech we have noted there are many, a little stretched Amgen is as good as any. Biotech has the problem of being sometimes a bit of Russian roulette – IBB (163) or XBI (112) are a way to avoid the loaded chamber. It’s nice to see Biotech and Pharma generally acting better, but participation has narrowed. Last week saw more 12-month new lows than new highs, and only little more than 50% of NYSE stocks above their 200-day moving average. Against the market averages dancing around new highs, that’s not a good backdrop, suggesting a Tech blowoff may be giving way to a garden variety correction.
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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