And like most investors, I’m wondering about the next move. Will the decline that has plagued the high-beta sector since late February continue? Or is now a good opportunity to “buy the dip”?
From a technical standpoint nothing could be more worrisome than a breach of the 200-day moving average. For the first time in 351 days the NASDAQ Biotechnology index (NBI) closed below the popular long-term trend indicator, the third-longest streak in its 20-year history.
Regardless of your thoughts on the fundamentals of the sector, the 200-day must not be ignored. Since the fall from grace in late February, the index has dropped roughly 20%, an area where the index has managed to rally each and every time over the next two weeks. And in fact, the index has lived up to its historical precedent, rallying roughly 7% since testing its 200-day moving average…so far, so good.
But there are a few other factors that increase the probability of a continued push lower.
Back in mid-March, Bloomberg reported that the percentage of IPOs announced with no earnings had reached 74%, the second-highest percentage in history. The key driver to the record-setting percentage is the push for biotech stocks, namely IPOs. According to Bloomberg, over the past year there have been over 20 money-losing biotech companies that have announced an IPO.(...)Click here to continue reading the original ETFDailyNews.com article: What’s Next For Biotech? [Novartis AG (ADR), Gilead Sciences, Inc., Amgen, Inc., GlaxoSmithKline plc (ADR), Teva Pharmaceutical Industries Ltd (ADR)]You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
- Bringing Big Finance To Little Biotechs [BioMarin Pharmaceutical Inc., Novavax, Inc., Teva Pharmaceutical Industries Ltd (ADR), Opko Health Inc., Novartis AG (ADR)]
- The Appeal Of Biotechs In Orphan Diseases [Gilead Sciences, Inc., BioMarin Pharmaceutical Inc., GlaxoSmithKline plc (ADR)]
- ETF Impact On The Biotech Sell-Off [Biogen Idec Inc, Gilead Sciences, Inc., Celgene Corporation, Amgen, Inc.]
- Is Biotech Getting Bubbly? [Celgene Corporation, Gilead Sciences, Inc., Merck & Co., Inc., NYSE:NVS, Novartis AG (ADR)]
- Biotech Stocks With Exciting Development Projects [Gilead Sciences, Inc., Novartis AG (ADR), Pfizer Inc., Biogen Idec Inc, Novavax, Inc.]