What’s the Next Sector Rotation trade after the S&P 500 Gained 1.8% last week and Chip stocks Soared? ….Update-3

May 12, 2026 | Biopharmaceuticals

Update-3..5/18-10:36a EDT…IBB and XBI down 1% but tape still looks good with several movers up:CRMD up 3%, NTRA up 4.37%,PSNL up 8.5%, VCYT up 5.5%.

Update-2…5/15/26  2:30P…TECH and Biotech are volatile with rising rates.

  • Small caps taking a hit with IWM down over 2%, XBI down 3%.
  • Large caps holding up well: ABBV, BMY, LLY, NVS etc
  • Metals getting crushed.with WPM down 6%.
  • Technology volatile with XLK down about 1%.

Update-1 5/14/26… Technology stocks continue to dominate with AI and Chip stocks.. The SOXX and the SMH continue to roll up 79% and 53% respectively and now NVDA is catching up after a breathing spell up 20%  in APRIL/May.

But we had one good day this week when the XBI speed to $137 only to fall back to $134. Many large caps are doing better: over the past 5 days ABBV up 3.98%, JNJ p 3.73%, LLY 3.2%, NVS up 3.01%, so you are not losing with biopharma while you trade technology stocks. And the IWM is tracking the XBI in the green after 4 days. Some notable + 2% movers from our trading list: AXSM, BBIO, CBIO, CRMD, CYTK,GH, PSNL,PTGX.

And of course if you missed it both CVS and UNH were up over 25% over the past month.

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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.
  • 5/13/26 11:45a: also movers rom our trading list: AXSM, BBIO, RYTM,

 

 

 

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