Tuesday, July 29, 2008

Biotech on a Tear

While most sectors have been faltering for the past month or two, biotechnology has been an exceptional performer, with the top biotech ETF, IBB, now more than 15% above its June low, as the chart below shows.

I last profiled biotech on May 1st in Time for Biotech to Turn Around? In retrospect, May and June were excellent months to get long biotech, even as the broad markets headed south.

Of IBBs top ten holdings, five of the ten are currently at or just below their 52 week highs, including:

  • Amgen (AMGN) – making another new 52 week high today
  • Illumina (ILMN) – made a new 52 week high yesterday
  • Celgene (CELG) – just 1.6% below its 52 week high
  • Gilead Sciences (GILD) – 5.7% below its 52 week high, but up about 40% for the year
  • Genzyme (GENZ) – 7.1% below the 52 week high, set back in January

Of course, there are many more success stories among some of the smaller cap biotechnology companies. So while the markets drift sideways and we wait to see if traditional technology stocks can provide leadership, this might be a good time to stock up on one of the few strong sectors: biotechnology.

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