MARKET DRIFTS LOWER -- BIOTECHS ARE STRONG
HEALTHCARE LEADERS INCLUDE BIOTECHS -- LIKE GILEAD SCIENCES... Yesterday's messages talked about strength in healthcare stocks -- including biotechs. Several biotech stocks are having strong days today. Here's what they look like. Gilead is the top gainer. After recently breaking through its November highs, it's been conolidating over that new support level. It's hitting a new high today. The weekly chart also shows this biotech leader trading over the highs of the past two years.
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GENZYME BREAKING OUT... Genzyme General appears to breaking out above the highs of the past three months. The weekly chart shows that would be a ten-month high. It also shows, however, that there's potential resistance near 40.
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HGSI AND IDEC ALSO GAIN GROUND... To round out the list of today's biotech leaders, Human Genome Sciences and IDEC Pharmaceuticals are gaining ground today. Both are trading well above their 50-day averages, but are still below their 200-day lines.
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BIOTECHS SHOW GOOD RELATIVE STRENGTH... We showed yesterday that the Biotech Index was trading over its 200-day moving average. That's one way to measure relative strength. Another is with ratio analysis. Since most of the biotechs reside in the Nasdaq, we're plotting a ratio of the BTK divided by the Nasdaq. As the green line under the chart shows, the biotechs have been holding up even better than the Nasdaq since last July. To the bottom right, it also shows biotechs doing better during this month. The Biotech Index still has a ways to go to turn its trend up. Until it's able to clear the trendline drawn over its August/November highs, the trend will still be sideways. But, as the above charts show, some individual biotech stocks have already turned up.
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INTERMARKET RETRACEMENTS... The various markets continue to retrace their moves of last week. Bonds are up a bit, while the dollar is down. Crude oil is up over a dollar. Gold is down 60 cents after recently bouncing up to $330. The stock market drifted lower this morning, but on light volume. The Dow is finding some support above the 8100 level, which we mentioned last night as its first support level.
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