IBB Falls as Energy Sector Negatively Influences the Market



IBB falls 2.3%

As oil plunges below $40 per barrel and commodity markets are under pressure, the outlook for the market does not appear to be bright in the near term. The S&P 500 fell 0.7% and the Dow Jones Industrial Average fell 0.65% on December 7, 2015. The biotechnology sector followed the market and saw some sell-offs.

The iShares Nasdaq Biotechnology ETF (IBB) fell by 2.3% and closed at $324.28, 5% lower than its 100-day moving average price of $341.38 and 2.2% lower than its 20-day moving average price of $331.61. Its trading volume was low at ~1.8 million shares per day compared to its five-day average trading volume of ~2.0 million shares per day.

The above table indicates the moving average prices, target prices, and returns of IBB and the SPDR S&P 500 ETF (SPY), the top and bottom performers of the day.

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Losers and winners

Ariad Pharmaceuticals (ARIA) rose 2.6% on news of the initiation of its Phase 3 OPTIC -2L trial. As per its press release, ARIA announced that “the initiation of a randomized Phase 3 trial of Iclusig® (ponatinib) in second-line patients with chronic myeloid leukemia (CML) in the chronic phase (CP). The OPTIC-2L (Optimizing Ponatinib Treatment In CML, Second Line) trial is designed to investigate the efficacy and safety of ponatinib, administered at two starting doses, compared with nilotinib, in patients who are resistant to front-line treatment with imatinib. ”

The stock closed at $6.02 and was trading below its 100-day moving average on December 7, 2015. ARIA has an RSI (relative strength index) of 31, indicating that the stock is close to being oversold. ARIA has a weight of ~0.2% in IBB’s portfolio.

Another stock that rose on December 7 was Alexion Pharmaceuticals (ALXN). Agios Pharmaceuticals (AGIO) was one of the biggest losers on the day, with a return of -20.4%.


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