Biotech Staying Power
One group whose relative strength continues to hold
up in the face of the uncertainty of the past two pre-election weeks has been
the biotechs.
You can see this for yourself if you take a look at TradingMarket.com’s Top
Ranked Exchange Traded Funds. What should jump out at you when you take a
look at this list is the fact that the Biotech HLDRS
(
BBH |
Quote |
Chart |
News |
PowerRating) has the most
consistently high relative strength rankings of any group that appears on
Tuesday’s list. It has a:
- One-week RS of 92
- One-month RS of 96
- Three-month RS of 82
- Six-month RS of 94
If that isn’t staying power, I don’t know what is.
I have my eyes glued to a number of the stocks within the biotech group.
Setups on a swing-trading time horizon are running their course.
IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating) pulled back on Monday to the level of its
Nov. 1, 2000, breakout and its 50% retracement (off the Oct. 30 low and the Nov.
3 high), found support there, and bounced. Today we see IDPH trading in a narrow
range and possibly looking to move higher once the election is out of the way. I
don’t know whether it will take the shortest route to higher levels and a
further testing of support is possible. Traders will be looking for the lowest
risk entry, which is likely to be on a pullback.
In Medarex
(
MEDX |
Quote |
Chart |
News |
PowerRating) we have a similar situation. But it’s
pulling back from Monday’s bounce. I like the way it’s pulling back to potential
support at its Nov. 2, 2000, breakout level and its 50% retracement level. If it
reaches that level, traders will be watching the action intraday to see whether
signs of support come in.
I will be there with you–watching.
Until Wednesday,