A crash for the markets - a crash for biotechs ? Message Board

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Biotech / Medical : A crash for the markets - a crash for biotechs ?

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To: trevor john wilkinson who wrote ()	12/6/1996 12:24:00 PM
From: Henry Niman	of 74

trevor, Of couse it depends on the size of the downturn. A modest dip would probably help Biotechs, because they are so depressed, relative to the rest of the market. Greenspan's remarks were directed more towards the larger issues which have shown extremely impressive gains. Biotechs have been rallying for about a week, yet they still rank 171 among 197 industry groups and they just rose above Jan 1 levels this week (and as a group they are less than 2% higher than Jan 1). This type of move is clearly not due to irrational exhuberence. Last year Biotechs were beneficiaries of the January effect. Clinicals from CNTO's Reopro ignited the sector and it rose steadily though the end of January (my favorite, LGND rose from 8 to 13 1/2 in less than a month). I have predicted a re-run this year and I think that a modest pullback would fuel such a rally (as profit taking from over valued sectors rotate into undervalued small stocks such as Biotechs). Of course a few positive clinicals wouldn't hurt, and I'm project such news to be announced at the H&Q Biotech meeting at the beginning of the year. Today, Biotechs dipped in sympathy, but most have already bounced back to yesterday's levels. Henry

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