Don't Ignore This Chart!

BioMarin Next In Line For Breakout Among Biotechs?

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BioMarin Pharmaceutical (BMRN), like the overall biotech industry ($DJUSBT), has struggled for the past 18 months to clear overhead price resistance.  But over the past couple trading sessions, we have seen one biotech company after another clear resistance on strong volume and accelerate.  It appears that BMRN is awaiting its turn.  While its gains this week have been strong, the best may await on a breakout.   Here's the longer-term weekly chart:

You can see that interest is picking up in BMRN as weekly volume is its highest in eight weeks to accompany a 9.7% move higher.  But a major breakout at 100 remains.  Money is definitely rotating towards biotech stocks and healthcare (XLV) as you can see that relative downtrend line (biotechs vs. S&P 500) has broken.  The XLV now has a SCTR reading of 95.6, the highest of any sector, and biotechs are the primary reason why as they've gained 7.66% as a group in the past week alone .  Given the weekly RSI and stochastic at 60 and 43, respectively, it would seem as if the BMRN party may just be getting started.  We do need that breakout on increasing volume to confirm, however.

Happy trading!

Tom



 

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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