BIOTECHS AND DRUGS ARE WEAKENING
DRUG ETF BACK UNDER 50-DAY LINE ... Drug stocks are coming under heavy selling pressure late in the week. As a result, the Pharm Holders (PPH) have fallen well beneath its 50-day moving average. [That's one reason to consider doing some selling -- or, at the very least, avoid new purchases]. Chart 2 shows the Biotech Index having traded under its 50-day line all week. It's now threatening its 200-day moving average. The Biotech Holders (BBH) in Chart 3 have already broken that important support line. I had recently suggested that the biotech group might be a place to put some defensive money (along with some select drug stocks). That doesn't look like such a good idea at this point.
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BIG BIOTECHS ARE FALLING ON VOLUME... It's not hard to see where the biotech selling is coming from. Three of the biggest biotech stocks are shown below. Amgen -- the biotech bellwether -- has broken its 50-day line on rising volume. Biogen Idec has also started to correct. Genentech (DNA) is trading at the lowest level in two months.
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BIG DRUG LOSERS... The last three charts shows where a lot of the drug selling is coming from. Merck has fallen 3 points today on rising volume. Bristol Myers Squibb has tumbled beneath its 200-day average. Schering Plough gapped beneath its 50-day line yesterday on heavy volume. All things considered, a very disappointing performance in what used to be considered a relatively safe defensive group.
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