BIOTECH IS DAY'S TOP SECTOR -- ETFS ARE STRONG -- BIOGEN IDEC HITS TWO YEAR HIGH AND IS BIOTECH LEADER

BIOTECH INDEX IS MONDAY'S LEADER... Last week's healthcare bounce was led by pharmaceuticals. This week leadership appears to passing to the biotech group. The Biotech Index (BTK) is up 1.8% in Monday morning trading and is the day's top market group. Chart 1 shows the BTK headed toward its first quarter high after recently bouncing off its 50-day moving average. Its relative strength line is on the verge of a new high versus the S&P 500. That explains why biotech ETFs are at the top of the day's rankings.

Chart 1

BIOTECH ETFS ARE DAY'S LEADERS... Biotech ETFs are the day's top performers on the American Stock Exchange. Chart 2 shows the Biotech iShares (IBB) moving up toward their recent highs. The Biotech Holders (BBH) look pretty much the same (not shown here). Both biotech ETFs are doing what they're supposed to do, which is to mirror the strong performance of the Biotech (BTK) Index.

Chart 2

BIOGEN IDEC HITS TWO-YEAR HIGH... One of the biggest holdings in the biotech ETFs is Biogen Idec which also happens to be a relative strength leader in the group. The weekly bars in Chart 3 show the biotech leader climbing over 60 for the first time in two years. It's rising relative strength line is plotted against the Biotech Index and shows that BIIB is a leading stock in this leading group.

Chart 3