The Biotech ETF, IBB, is up more than 50% in 2013, quite a performance for a relatively well distributed ETF with no one component comprising more than 9% of the ETF’s weight. The rally in biotech has been broad-based for sure, with a few major standouts.
First, the chart of the ETF shows the major breakout in 2012 after more than a decade of stagnation:
The largest company in the group is now Gilead. GILD was a $25 billion market cap company at the start of 2012. The stock’s four-fold increase since then has made it the largest biotech by market cap, and on par with American behemoths like MCD, PEP, and MRK. The bulk of the advance has occurred in 2013:
The stock made a new all-time high yesterday, and the stock remains in a monster 18 month uptrend of higher highs and higher lows.
I am paying close attention to the price action in the biotechs given their leadership position in the bull move since the October 2011 lows in the broader indices. CELG and GILD broke out to new highs yesterday, while AMGN, BIIB, and REGN are still below their 2013 highs. Meanwhile, the IBB ETF is still about 3% from its high made on Oct 1st. A new high in IBB will be one more feather in the bulls’ cap.