Biotech Bull Market Unfolding?
Resilience in markets are often tells. The price action in market instruments is usually trying to tell investors something. With the biotechs, the message looks to be a positive one. After backing off significantly twice prior at its 200 day SMA, the ETF seems to have found some confidence here as it trades sideways as it readies itself for yet another test of the line for the third time in as many months. The 20% combined gains during a 4 week winning streak the weeks ending between 12/28-1/18, are being digested well. Next time the secular line is touched on the upside could be the break above.
The Big Four Became Three:
The biotech group formerly was dominated by AMGN, BIIB, CELG and GILD. These supertankers over the last couple years have bifurcated with CELG and GILD stinking up the joint (CELG of course was taken out by BMY the first trading day of ’19). AMGN and BIIB were fighting it out for the top spot. AMGN was sniffing out a double bottom trigger of 209.09 as recently as 1/18, before falling 6 of the last 7 sessions (the one up day on 1/29 rose by less than .1%). Out of the three that remain I would say GILD looks most attractive, IF it can climb above its 200 day SMA. There are better fish to fry.
The IBB has gained 12% YTD, a solid performance. Below is the chart of SRPT and how it appeared in our 1/24 Healthcare Report. The stock has gained almost 30% since the Christmas lows just above the very round par number. It filled in a gap in late December from the 6/18 session (6/19 jumped 37% even CLOSING 25% off intraday highs). Wednesday it jumped more than 12%, after its recent successful retest of a bullish falling wedge breakout.