Stocks continue to bask in the better than expected NAPM data. The Dow is up 225 points, with 18 components up more than $1, and only HP not in positive territory. The S&P 500 is putting in a solid 1.84% gain, and the Nasdaq is 1.60% higher than it started the day, thanks to biotechnology stocks.
Biotechnology Daily Chart
It looked like the Biotechnology Index (BTK.X) was going to roll over when it met resistance at 550, but has been able to consolidate above the declining 50-day moving average. By falling less than the S&P 500, BTK has broken the two and a half month trend of under performing the S&P 500. Even with today's 3.18% gain, the Biotechnology Index is not out of the woods yet. The 200-dma stills needs to be taken out before BTK can climb above 574. For today, a close above 550.76 will do.
IDEC Pharmaceuticals Daily Chart
IDEC Pharmaceuticals (IDPH) is one of today's best performing biotech stocks, up $3.09. Two weeks ago the stock went on a three-day run that took out several resistance levels. Last week it consolidated just above the 38.2% retracement at $59.14. Rather than roll over, IDEC looks like it wants to break out of its trading range. Volume is less than impressive and IDPH does look a tad overbought, but IDEC looks like it wants to take out last weeks high of $62.33. There is a potential $7.70 upside to $70, with out an outside chance of $75, but the downside risk is $3.30.
Amgen Daily Chart
Amgen (AMGN) has been a little more volatile, but more or less has held above support at $62.91. Much like IDPH, AMGN still needs to take out last weeks high of $65.60 while dealing with an overbought status.