Sector Update: Health Care and Biotech Stocks Hot

I recommended the Health Care Sector ETF (NYSEARCA:XLV) in my June 8th “On The Mark” newsletter, predicting a short-term move up to the 79/80 area.

Today we’ll provide an update while looking at the red-hot biotech sector (NASDAQ:IBB) as well.

XLV is now trading at 79.63 for a 3.8% gain in 9 trading days vs. a 0% move in the S&P 500. Short-term traders/investors can take profits here as the slope of the advance is getting pretty steep on the daily chart. My intermediate-term target was 88/90 so longer term investors can hold.

XLV Health Care ETF Chart

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While healthcare has done okay, biotech stocks have exploded this week with big gains in the IBB. While it’s tough to argue with this breakout, there are some kinks here. First, we’ve seen this game before with biotech’s breaking out on very strong moves only to rollover. This is not a breakout to all-time highs so there is plenty of supply sitting on top of the index. Third, the base here is very volatile, and therefore, much less reliable as a platform for gains. Fourth, while 2 of the largest biotech’s, Celgene (NASDAQ:CELG) and Regeneron (NASDAQ:REGN) have broken out, two other (Amgen – AMGN and Biogen- BIIB) remain in volatile bases while another Gilead (GILD) remains in a steep downtrend.

No recommendations here, just observations. See charts below.

Feel free to reach out to me at for inquiries about my newsletter “On The Mark”.  Thanks for reading.


Twitter:  @MarkArbeter

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.