Why Biotech Stocks Will Continue To Reach Record Heights
The XBI is now up by over 12 percent on the year, while the IBB is up about 10 percent, and the rally in both appears likely to continue. The IBB has little if any resistance standing in its way, until $122.
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When looking at the components of the XBI, we can see that only three stocks out of the top 25 are down so far in 2018. While the big gainers have obviously been Juno and Bioverativ, others such as Loxo Oncology ($LOXO), Array Biosciences ( $ARRY), and Radius Health ($RDUS), have all jumped by over 20 percent.
While the big names like Gilead ($GILD), Biogen ($BIIB), and Amgen ($AMGN) are not among the big gainers, they are putting together solid years. Gilead has jumped by roughly 13 percent and appears poised to continue to rise.
The chart below shows how Gilead shares cleared a critical resistance level around $80, and that could set the stage for a rise towards $90.
Amgen shares have also surged to record highs as well and likely has more gains ahead as well. Plus it will now have strong support around $191 to $192 going forward.
Biogen shares are nearing a massive breakout, one which could send the stock much higher, with the potential to rise to all-time highs. A rise above $355 sets the stage for the breakout. The company is set to report results on January 25, before the open.
Even shares of struggling Acadia ($ACAD) are breaking out of a multi-month down trend, and what appears to a firm double bottom now in place, perhaps we can see this stock have a multi-year breakout, should it share price rise above $34.
With M&A coming back to the front center, the biotech stocks are starting to see life again.
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Michael Kramer and the clients of Mott Capital own shares of ACAD, CELG and ALKS
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