Biotech Tiring?

The group as a whole has seen some nice moves from leaders. One can point to IONS which is on a current 6 week winning streak that has jumped by more than a combined 39%. It is well extended past a WEEKLY cup base pivot of 65.61 in a base that began in October ’17 (the week ending 3/1 exploded by 18.6%, after the prior four weeks ending between CLOSED very taut all within just .49 of each other). BIIB on the other end of the spectrum down 39% from most recent 52 week highs. Let us take a peek at the overall group via the XBI. It is about to complete a golden cross, which is not a great indicator, and even here is doing so because of a downward sloping 200 day SMA.

Generic Impotence:

The generic sub sector of healthcare has not been kind to investors, unless of course they have been short. On this chart below one can see the weakness that has been witnessed in names such as ENDP PRGO MYL and TEVA. Although the first two on that list are UP YTD thus far, all four are lower substantially from their most recent 52 week highs. MYL is the “best” actor off only 36% from its most recent peak, and ENDP is now 56% off its most recent ascent. There are certainly better spaces within healthcare to deploy capital. 

Examples:

There is no question dealing with certain health care stocks is a riskier business than other groups. Below is a good example of the chart of GH and how it appeared in our 4/4 Healthcare Report. This is a stock higher by 76% YTD yet now trades 38% off most recent 52 week highs. It recorded a bullish hammer candle on 4/2, off its upward sloping 50 day SMA, in its second largest daily volume ever (came public last October, but still a strong feat). The round numbers come into play with par showing a strong rejection in March and the 40 and 50 numbers late last year and early this year. My feeling is that there is pretty good risk/reward to the upside here. 

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