Biotechnology has traded basically sideways since the start of 2023.
In the face of higher rates, stronger dollar, inflation, FDA approvals and busts, and an emerging winter season, the ETF IBB has a serenity to it that appears drug-induced, if you will.
Of the top 10 holdings, Regeneron is the big winner as of right now, while Biogen is under pressure. Note; you may want to keep your eyes on a potential bottoming pattern in BIIB.
- Amgen Inc.: 9.75%
- Vertex Pharmaceuticals Incorporated: 8.56%
- Regeneron Pharmaceuticals, Inc.: 8.11%
- Gilead Sciences, Inc.: 8.10%
- IQVIA Holdings Inc.: 3.82%
- Biogen Inc.: 3.64%
- Seagen, Inc.: 3.46%
- Moderna, Inc.: 3.39%
- Illumina, Inc.: 2.59%
- Mettler-Toledo International Inc.: 2.53%
Furthermore, and even more interesting, is that the ETF does not really reflect the big movers. Rather, IBB is holding as a result, but not flying. Is it time to buy IBB?
On the daily chart, and what is not shown here, is the July 6-month calendar range low at 124.11. Only once has IBB traded below that level in 2023, in March after the bank mini-crisis. Hence, we feel good calling 124 the bottom of the trading range and risk point.
The top of the trading range of the July 6-month indicator is 130.50. Again, IBB traded above that in early 2023 when it soared to 138. However, since then, 130-132 has been resistance. We feel good calling that level the top of the trading range.
As far as other indicators, Real Motion looks like a double bottom from early July and now, although we would like to see more momentum. On the weekly chart, we can say the same.
Our Leadership indicator shows IBB outperforming SPY on a daily timeframe, but still underperforming on a weekly basis. On the price, over 128 will pique our interest.
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- S&P 500 (SPY): 437 is the July 6-month calendar range low; will look for a return above or a trip to 420.
- Russell 2000 (IWM): 181.94 the low of the week is key; 180.72 the 6-month calendar range low.
- Dow (DIA): Relative strength here a return over 346 positive.
- Nasdaq (QQQ): 363 the July 6-month CRL, BUT held a key weekly MA at 357.
- Regional banks (KRE): Outperformer, as all this did was fall to the July range high at 44.40.
- Semiconductors (SMH): 145 a weekly MA support level with 150 pivotal.
- Transportation (IYT): Landed on the July 6-month calendar range low. If holds, a positive.
- Biotechnology (IBB): Compression between 124-130.
- Retail (XRT): 62.80 the July 6-mo. calendar range low; this held the 200-DMA as well.
Director of Trading Research and Education