Biotechs were a leading sub sector in 2013, and have attracted a lot of attention to start 2014 as a result. In mid-January I highlighted the charts of the “Big Four of Biotech” in a Chart of the Day post, noting that all four stocks (AMGN, BIIB, CELG, and GILD) were trading above their 50 day moving averages.
This morning, IBB, the biotech ETF, almost touched its 50 day moving average for the first time this year, but has since had a sharp bounce intraday:
IBB has not traded below its 100 day moving average (green) in more than a year, quite a strong uptrend for a sector ETF.
Two of the big four are still trading above their 50 day ma (AMGN and BIIB), but CELG and GILD are significantly underperforming today. Both stocks are at important technical inflection points in the context of their long-term uptrends.
CELG touched its 200 day moving average for the first time in more than a year today, and has bounced from there:
The 200 day ma around $148 is also near the yearly low for CELG from the late Jan / early Feb selloff.
GILD, which is the largest biotech company in the market, at around $115 billion market cap, is still well above its 200 day moving average. However, the stock is touching its 100 day moving average
The stock has bounced off of its 100 day ma in late June and late October, and has not closed below it in more than a year.
The biotech leaders are worth watching in the coming days as a barometer for the broader market. They are at natural bounce points on the charts. The next few days will tell whether that historical pattern continues to hold.