one of my favorite sectors to short at this time is the biotech sector. in fact, there are so many nice charts that i really can’t pick any one or two favorites (although the recently triggered BIIB active trade is one of my top picks). therefore, i will try to put together a video covering the trade ideas in that sector asap, hopefully tomorrow. i went thru the charts of all 116 components of the IBB (iShares Biotechnology Index Fund ETF) and here is list of some of the best looking shorts in the group, as well as two longs that stood out, for those preferring long-side trade or maybe wanting to hedge against short position in the sector:
BIIB, QGEN, PCYC, ALXN, VRNM, CELG, MDCO, IMGN, REGN, XOMA, VRTX, VVUS, AMGN, GILD
the two most potentially bullish looking stocks in the sector that stood out to me were SVNT (bull-flagging on the daily time frame) and ITMN (broke above a daily downtrend on thursday and re-tested friday). again, i’ll try to do a video overview of these chart as that would be much more effective and less time consuming than annotating & posting all 16 charts. however, for those preferring the relative safety of trading etf’s vs. individual stocks (especially the high-beta, higher risk biotechs), here’s the IBB daily chart, showing a very clear breakdown of it’s bearish rising wedge pattern on friday. you can also view the holdings of the IBB and their respective weighting by clicking here. the fact that that six largest holdings were all among my favorite short setups out of the 116 (equity) holdings makes a short of the diversified etf that much more attractive IMO. IBB will be considered an active trade at the open tomorrow (monday morning) although one might consider shorting 1/2 position and waiting to add the second half on either a re-test of the wedge or if/when the broad markets ($SPX & $DWC) break below the 1420 & 14,830 levels, respectively.