Biotechnology stocks ($DJUSBT) are among the best performing stocks since the beginning of June with an approximate 16% gain over the past seven weeks. It's not unusual for biotechs to remain on a tear for an extended period of time so pullbacks should be considered for entry. The rising 20 day EMA is one such level to consider after a bout of selling as the weakness from late June into early July demonstrated. Check it out:
The group is in breakout mode again with signs pointing to higher prices ahead. However, the DJUSBT is overbought once again so consider an upcoming pullback to test the rising 20 day EMA, currently at 1876, to be a solid entry level. Price support near 1910 should also encourage buyers.
Happy trading!
Tom
About the author:
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market.
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