Article By:
Tarun Chandra, CFA
Wednesday, May 15, 2024 5:26 AM EDT
While biotechs have significantly lagged behind the broader market, there is reason to be optimistic once inflation-related volatility subsides. IBB and XBI present good vehicles for biotech exposure.
Biotech Review - Waiting For A Reset
Good analysis. However, you missed the hourly chart. The biotech correction on the daily is possibly over. Why? Because the daily averages crossed and point upward on hourly chart. Talking daily, the current candle is perfectly sitting on the trend line support and between the 10sma and 30 ema with $XBI on a intact uptrend. So all stars seem aligned for the XBI to resume in a upward channel.
Leadership (Bio-Tech) Breakout; Good Sign For Broad Market
My Simple Forecast:
Looks like $XBI has had a positive growth trend. With middle of the year approaching I believe that the cycle will repeat, thus hitting high points again. The seasonal patterns may be based on the rate of discovery of new technology, so cycles may be of unusual lengths. Nonetheless, looks like $XBI is positively correlated to SP500, and it is leading variable. We can anticipate new highs by beginning Q3.