Pharma Stock Market Outlook: The pharmaceutical industry has been at the forefront of the global response to the COVID-19 pandemic, with companies racing to develop and distribute vaccines and treatments. This has led to significant market activity and investor interest in the sector. Here’s a comprehensive market outlook based on the most recent data.
Market Price Action and General Outlook
The US stock market closed lower today, with the Dow Jones Industrial Average down 0.23%, the S&P 500 down 0.02%, and the Nasdaq Composite down 0.12%. The decline was led by losses in technology stocks, as investors weighed the possibility that the Federal Reserve might pause rate hikes after growth slowed in the services sector. The energy sector was the only major sector to post gains.
Market Gex and Gamma Distribution
The current SPX spot is trading at 4537.41, which is higher than the gamma flip point of 4504.1. This implies that this strike price acts as a key support level for the market.
Analyzing GEX exposures by strike reveals that the highest concentrations of gamma are found at strikes of 4647.1, 4669.1 and 4625.1 with notional gamma per 1% move being 51 billion, 49 billion and another 49 billion respectively.
Given these positive values, we would expect daily movement to be subdued due to negative feedback – market makers will likely re-hedge by buying as stock price falls and adding to their short positions as stock price rises.
Looking at put/call gamma levels across all expirations shows us where dealers’ hedging activity could impact underlying volatility most significantly. Strikes of interest include:
- Strike: 4600 with a net call gamma exposure of +238.92 million (Call Gamma:238.92M, Put Gamma:-118.16M)
- Strike:4550 with a net call gamma exposure of +177.63 million (Call Gamma:177.63M, Put Gamma:-129.25M)
- Strike:4500 with a net put gamma exposure of -36.83 million (Call Gamma:151.27M, Put Gamma:-188.M)
Positive net call gammas suggest bullish sentiment from option holders while negative figures indicate bearish sentiment.
The recent MSI and VIX signals show a cautious market sentiment. From 2023-06-14 to 2023-07-27, the MSI fluctuated between -0.12 and 3.4 indicating an overall positive but varied sentiment within the investors. The VIX maintained mostly in the low range (<=16), suggesting that fear was relatively low among investors during this period.
From mid-June until end of July, there were instances where MSI was significantly positive (>3) while VIX was on a lower side; such as on 2023-06-21 and 2023-06-23 with MSIs of 3.12 and 3.4 respectively while corresponding VIX values remained below or around 13, suggesting possible market correction due to limited vanna/charm dynamics.
On most days towards late July, both the MSI and VIX are either decreasing or maintaining their levels which suggests a probable upswing in the market ahead unless we see an increase in MSI again.
On July 19th we witnessed near-zero MSI level along with a slightly increased VIX value compared to previous days’ average, hinting at heightened sensitivity to sudden changes influenced by the volatility index during this period.
As per current data till July-end, it’s advisable for traders with substantial long positions to stay vigilant since any unexpected change might affect their investments due to low-range VIX coupled with occasional significant positive MSIs.
- Aloe Vera Plant: Morphology, Phytochemical and Microscopic Characters
- Aster Plant: Description, Phytochemical, Classification & Benefits
- Azalea Plant: A Botanical Guide for Gardeners and Scientists
- Understanding Cell Biology: An International Certificate Course
- Understanding ISO 13485: A Guide to Medical Device Quality Management Systems
- M. Pharm Thesis Topics for Pharmaceutics (Updated)
- M. Pharm Thesis Writing Services: A Comprehensive Guide
- Sample Thesis for M. Pharm Project: Download thesis Sample Format
- How to Write a Literature Review? A Comprehensive Guide With Examples