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Biotech and Technology Stocks Rally, Is It A Breakout or Fakeout?
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Biotech and Technology stocks both showed a little bit more life today, then they have in past days. Should this trend continue tomorrow, it would be a good sign for the stock market as a whole.
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S&P 500
The stock market continues to be extremely volatile, with another day of wild price action. I think I wrote this last week, but it makes trading this market nearly impossible. I’m glad I do not trade the market, and only use a buy and hold strategy, easier to manage, and less stressful. The S&P 500 lows reached 2,700 today, by the end of the day we made a round trip and finished lower by only 1 point, go figure. The volatility remains too dangerous to try to time anything these days. The sad part, I think it is here to stay for some time, and we should get used to it.
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Biotech Stocks
The NASDAQ Biotech ETF (IBB) closed today just a hair above $111.50, at $111.80. For me, that is not enough to say it broke out. You need to watch tomorrow for a follow through. The group needs to continue higher and manage to rise significantly above $112. Also, I want to see this group meaningfully outperform the major averages. If we get those two pieces tomorrow, I become much more constructive on the group. But to this point, I’m not convinced.
The iShares Biotech ETF (XBI) had a much sharper rise, but again, I want to see a meaningful follow through tomorrow.
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Technology Stocks
The technology ETF (XLK) is making a move towards resistance again, and all I can say is that this time it better rise above $69.25. We do not want this group failing three times at resistance.
If these two sectors can start working, then I think I would become more constructive on the stock market. For now, I think these moves need to continue to be considered suspect. The way the stock market whips around these days, it makes it impossible to sit back and just ride a trend, because that trend can change direction very quickly.
That’s gonna be it for today. Let’s see what tomorrow brings.
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Tags: #sp500 #biotech #technology #stocks #sp500
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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