Have The Biotech Stocks Topped Out?
The biotech stocks have the been one of the leading stocks sectors throughout 2012 and 2013. The Market Vectors Biotech ETF (NYSEARCA:BBH) has rallied higher by more than $36.00 since August 10, 2011. Today, the BBH is trading lower by 0.41 cents to $64.32 a share. The BBH looks very overbought and extended on the daily and weekly charts. This tells us that a pullback should be expected as it is very overdue. Short term traders should watch for intra-day support on the BBH around the $63.70, and $62.30 levels. The daily chart will likely have support around the $60.00 area.
Some other biotech ETF's that traders can follow include the SPDR S&P Biotech (ETF) (NYSEARCA:XBI), and the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB). Some of the leading biotech stocks that make up a large part of these ETF's include Amgen Inc (NASDAQ:AMGN), Celgene Corporation (NASDAQ:CELG), and Biogen Idec Inc (NASDAQ:BIIB). All of these stocks have traded very similar chart patterns to the biotech ETF's so they are very susceptible to pullbacks at this time.