Biotech Breakout

June 25, 2015 by  
Filed under News, Swing Trading, Trend Trading

 

The biotech index broke out of a beautiful, bullish double bottom pattern last week within one of the best uptrends of any industry in today’s market.

 

Biotechs have been leading the market higher for a long time now. Since the bottom in 2009.  In fact, Biotechs are up more than 600% since its lowest point in 2009 as measured by the Biotechnology index ($nbi is the ticker) – more than doubling the return of the Nasdaq.

 

And biotechs did not correct as much during the financial crisis.  Correcting just 37% from top to bottom versus nearly 56% for the Nasdaq and nearly 58% for the S&P 500.

 

So not only is it a great growth area but the group tends to hold up better during market crashes than the Nasdaq.  So traders need to have this group and individual biotech stocks on their radar.

 

The biotech bull market continues to rage on.  And last week the biotech index broke out of a bullish chart pattern within its terrific multi-year uptrend.

 

 

You can see on the weekly chart above how the group pulled back in late March and then late April.  Forming the “W” in the double bottom pattern.  Notice too how this double bottom has a handle on the right side of the pattern.

 

The 2nd low in April took out the prior low in March which is a bullish sign.  And the handle, or horizontal consolidation area, on the right side of the double bottom, makes lower lows – another very good sign from a technical standpoint.  And then we see the strong breakout that occurred last week.

 

A pretty text book bullish consolidation pattern in a biotech bull market that has been going on for many years. 

 

Many of our top biotech and healthcare-related stocks are starting to move strongly as the group breaks out, including ANAC.

 

The medical equipment index has also broken strongly out of a bullish cup with handle pattern recently. 

 

We have a few other healthcare stocks that are very near ideal technical entry points on our site.  Stocks with rapidly improving fundamentals to support a big move higher.  Sign up for a free trial off in the upper right if you have not already.  We are also offering a promotion right now for a limited time.

 

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