Biotech continues to rip higher following our bullish analysis
earlier this month regarding LABU – one of the bullish leveraged ETF’s
tracking the sector – and the biotech space in general.
Although we did recently suggest an exit of LABU for those who picked
it up earlier in the month, we’re still convinced biotech, healthcare
and pharma may end up leading these markets higher once the major
indices are ready to resume their long-term bullish trend.
We’re noticing many small and large biotech stocks are starting to behave much better finally, which should be a welcomed event for many of you out there who like exposure to the space.
Below is a daily chart of BIB, another bullish leveraged ETF tracking biotech, and as you can see here, the ETF has made a tremendous move over the last few days.
Problem is, when you drill down into the weekly chart on much more of a long-term basis, you can also see the ETF has made a new multi-month high, and when we consider there’s probably an overly crowded trade setting up to the long side across the entire biotech space in recent days, don’t be surprised if these bullish leveraged ETF’s tracking biotech end up getting reversed in fairly sharp fashion soon.
It would be at that point – depending on where the major indices are – we’d likely suggest getting long the space yet again, and more importantly start exposing ourselves to even more quality healthcare and pharma names, in addition to select biotech names, in anticipation of a much bigger move to the upside over the next several months.
Something’s going to have to lead when these markets are ready to move much higher again, and considering the above mentioned sectors have been beaten down – both technically and fundamentally for quite some time – we’re assuming this is where the value will end up being.
It’s important to remember when it comes to stocks and the sectors they live in, money has no home. So, it’s likely to be those lagging sectors, including small caps, that will lead these markets higher when it’s time.
We’re noticing many small and large biotech stocks are starting to behave much better finally, which should be a welcomed event for many of you out there who like exposure to the space.
Below is a daily chart of BIB, another bullish leveraged ETF tracking biotech, and as you can see here, the ETF has made a tremendous move over the last few days.
Problem is, when you drill down into the weekly chart on much more of a long-term basis, you can also see the ETF has made a new multi-month high, and when we consider there’s probably an overly crowded trade setting up to the long side across the entire biotech space in recent days, don’t be surprised if these bullish leveraged ETF’s tracking biotech end up getting reversed in fairly sharp fashion soon.
It would be at that point – depending on where the major indices are – we’d likely suggest getting long the space yet again, and more importantly start exposing ourselves to even more quality healthcare and pharma names, in addition to select biotech names, in anticipation of a much bigger move to the upside over the next several months.
Something’s going to have to lead when these markets are ready to move much higher again, and considering the above mentioned sectors have been beaten down – both technically and fundamentally for quite some time – we’re assuming this is where the value will end up being.
It’s important to remember when it comes to stocks and the sectors they live in, money has no home. So, it’s likely to be those lagging sectors, including small caps, that will lead these markets higher when it’s time.
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