The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), which tracks the Nasdaq Biotechnology Index, and rival biotechnology ETFs are again taking it on the chin.
IBB, the largest biotech ETF, is off more than 10% over the past month leaving some investors to ponder when a legitimate biotech rebound will occur.
Investors who are closely watching the presidential race will want to keep an eye on Democratic nominee Hillary Clinton in the coming months.
If Clinton makes her way to the Oval Office and implements more regulation on pharmaceutical drug pricing, biotech companies may underperform the broader market.
SEE MORE: Resisting the Temptation of Biotech ETFs
Practical advice for those eager to time a biotech rebound would include waiting until after Election Day. Looking at the technical situation for ETFs such as IBB and the SPDR S&P Biotech ETF (NYSEArca: XBI) and the First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT) reveals waiting beyond Election Day could be advised.
Looking at the equal-weight XBI, “you can see that the 50-day and 200-day moving averages crossed in mid-summer, which was a clear long-term technical buy sign. The recent pullback has pushed the price toward the support of the 200-day moving average, which many are expecting to prop up the price from further selling pressure. At this point, it looks as though the bulls will be seeking to open new positions as close to the trendline as possible and protect themselves from a future selloffs by placing stop-loss orders directly below $56.48,” according to Investopedia.[related_stories]