Look for Sector Rotation with Momentum: Healthcare and biotech.
- XBI had good momentum last week and the tape looked good today early but faded quickly to a flat finish at $134.75.
- Large cap biopharma are about 10-15% off recent highs and offer good value with dividends.
- Investors have deep pockets and have a RISK ON attitude so look for a biotech surge within 3-4 weeks.Watch RSI’s for clues.
But the requirements for any biotech rally should be IWM strength with the XBI momentum, and hopefully some clinical development or M&A news. The low for the XBI should be $130 and break through $140.
Here is theSector performance trends from last week: AI and SEMI Stocks https://www.ssga.com/us/en/individual/capabilities/equities/sector-investing/select-sector-etfsContinue to Bring Huge Gains
FOCUS Sectors YTD and some Key Stocks: This could be a pivot day for overheated technology sector.
TECHNOLOGY and IT Major theme AI: XLK up 6.3%, QQQ up 5.4 % new high, Semis SOXX up 13%, The key point with technology stocks is that it is being driven by earnings, If you missed AMD, INTC and other chip stocks you may be down YTD. Suggestion buy a fund like FSELX or an ETF like XLK, but not just now.
ENERGY: down 6.2%: Blue chip leaders Exxon (XOM). Chevron (CVX),Valero (VLO) take a ~ 6% hit on “Trump peace deal” talk. But today as the IRAN deal faded all energy stocks rallied. With all the energy requirements of AI and a strong economy it should holdup.
Industrials down 0.33% but XLI is up over 12% YTD. Leadership stocks provide power, manufacturing and transportation. Included in the sector are BA, GE, CAT, and RTX.
Healthcare XLV down 0.87% : stock picking among SMID caps growth stocks helped stave off of bigger losses: DVA ,VTRS; some help? from BDX WAT earnings; but PPH down 2.4%. FBIO flat YTD off February highs. CVS up 10.3% on strong Q1 earnings and guidance from Aetna. Healthcare is getting no help from MEDtech in 2026. Recent earnings of BDX were good yet stock is down 10% from 5 day highs! ISRG is down another 10 % today to one year low. IHI at a one year low at $47.55!
- Large Biopharma leaders: JNJ up 6.94% YTD and battling it out with ABBV for autoimmune and psoriasis products. BIIB is up again and shows gains of $12.48% YTD at $197.95 a slight breakout from the recent downtrend. Our leading pick for this group of stocks has been Novartis (NVS) up 5.27% YTD. Most of these stocks are off their Q1 highs so with ASCO coming up could show significant gains with news from their oncology pipelines.
- SMID biopharma trades and holdings: flattish over the past five days as IBB up 1.6% over 5 days, but only 0.69% YTD. ARKG mixed recently at $29.94 off FEB top of $34.24.
- SMID momentum with XBI over past 5 days picking up 3.2% over 5 days and 10.48% YTD, helped by Russell 2000 (IWM) up 1.75% 5 days, up 14.57% YTD. Stocks to watch:ABOX, ABSI, CYRX, CYTK, EYPT, ILMN, PTCT, RCUS, XENE, XNCR. Uptrend holding.