Biotech Bandwagon:

There is a saying once the train has left the station, stay onboard and enjoy the ride. If the train comes back to pick you up there is probably something wrong with it. One could interpret this as leaving an investment in “cruise control” and let the trade play out, of course as long as it is still working. The chart of the XBI below could be a good case. Between early May and early June the bears had all the reason to push the fund lower, but was unable to do so. Multiple bearish candlesticks could not do the job, and in the middle of June PRICE caught up to a comforting, upward sloping 50 day SMA. A strong, recent 8 session winning streak ensued as the bears gave in, and now a bull pennant has taken shape. The XBI was not lifted on a powerful session Monday, as it was essentially flat, as healthcare overall via the XLV was the “worst” major S&P sector up .9%. ICPT a big laggard before today lost nearly 40%, GILD turned a 3% early move higher to CLOSING lower, certainly did not help. Keep an eye on the largest component in MRNA as it holds the round 60 number and an upward sloping 50 day SMA.

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