The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), the largest biotechnology exchange traded fund, and rival biotech ETFs have been tempting, even teasing investors with signs the group may be ready to rebound this year only to let market participants. That trend may finally be ready to reverse.
After rallying late in the first quarter and to start the current quarter, it looked liked as though biotechnology stocks and exchange traded funds were shaking the doldrums that have plagued the group dating back to last year.
In recent weeks, IBB, the largest biotech ETF, has been scuffling. The same can be said of rivals, such as the SPDR S&P Biotech ETF (NYSEArca: XBI) and the First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT).
There is some encouragement at the fundamental level. The time to buy, regardless of sector, is usually when a particular group falls out of favor, not when it has been bid higher by scores of investors. Some investors view that as the case with the broader healthcare group and biotechnology in particular.[related_stories]
Piper Jaffray technical analyst Craig Johnson said of IBB in an interview with CNBC that the ETF is nothcing “a series of higher highs and higher lows coming off the recent lows here in that particular index.”