Time To Pay Attention To The Most Hated Sector Of 2016

I know we’re all suppose to hate Biotech stocks ($IBB) in 2016 but there are a lot of individual names firming up in this sector in what I would consider actionable bases.

Let’s first take a look at the $IBB itself. We’ve been moving sideways trading in a range now between 245 and 265 over the past couple of months. Price currently sits right in the middle of that range and with flat moving averages and a prior intermediate downtrend it’s tough to really get behind this sector from this picture alone.

IBB_3_24

But if we start to drill down and look into some of the individual names that make up this index, we can actually see that there are a number of interesting looking stocks that are close to breaking out or have just recently broken out. Take a look at the names below.

BXLT_3_24

NKTR_3_24

PRTA_3_24

ICPT_3_24

When I see a large number of names in a sector start setting up like this it always grabs my attention. Particularly if the heavy weighted components in this index like $AMGN $BIIB $GILD are not out there leading, the index itself could look a bit more sluggish then what’s really going on under the hood.

With the $SPY and $IWM pulling back now a few days in a row, perhaps early next week if we see a bounce, this is a sector that could surprise.

 

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Evan Medeiros

Evan is the founder of the Trade Risk. With 20+ years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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