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 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. Learn More
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