“On a purely technical basis, seeing the iShares Nasdaq Biotechnology ETF close above $255.50 and the SPDR S&P Biotech ETF close above $49.60 would represent a short-term breakout above the current range. That would be a bullish trigger, although it’s worth noting that both ETFs are at risk of getting overbought on that kind of move…From a bull’s perspective, the best case scenario is probably a strong close near the highs today and a big volume day tomorrow,” according to a note from Cornerstone Macro posted by Ben Levisohn of Barron’s.

Recent options market data also suggest traders are betting on a second-quarter biotech bounce.

IBB “traded 2X daily call volume with notable trades including a buyer of 4,500 May $280 calls at $4.70 to $4.72 (a $2M+ trade) and a late afternoon buyer of 2,000 April 8th (W) $265 calls at $3.60. The IV Skew in the IBB is steeply sloped, so OTM calls are cheap as IV has also pulled back around 30% since peaking in early February,” according to See It Market.

iShares Nasdaq Biotechnology ETF