3 Biotech Stocks That Could Pop in a Heartbeat – InvestorPlace
3 Biotech Stocks That Could Pop in a Heartbeat
Biotech stocks have been on a tear lately, with the SPDR S&P Biotech (ETF) (NYSEARCA:XBI) outrunning the S&P 500 about 45% to 10% over the past 10 months.
Click to Enlarge And momentum still is on biotechs’ side, with 57% of the XBI’s components trading above their respective 50-day moving average. For perspective, the S&P 500 only boasts 41% on that front, and the Dow Jones Industrial Average only 33%.
One of the older rules on the Street is that you shouldn’t “fight the tape.” Still, a growing number of short sellers are initiating bearish positions on these stocks. And any student of our approach knows that we love to see rising short interest on a technically strong stock or sector because it indicates the likelihood of a short squeeze rally.
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Our proprietary ETF Weighted Short Interest Ratio ranks the XBI’s companies as the second most shorted group in the market. In fact, the positive breadth, technical strength and large outstanding short positions on the XBI’s stocks puts the fund within our top three ETFs to hold during the first half of 2015.
So, how can you profit off this strength? For one, you can just buy the XBI. Besides beating the market by threefold over the past year, XBI also has been less volatile than the broader market over the same period. That means you’re generating alpha and reducing risk.
But if you’re interested in buying a few individual companies, here are three biotech stocks that stand out right now.
Article printed from InvestorPlace Media, http://investorplace.com/2015/03/biotech-stocks-xbi-mygn-thrx-ghdx/.
©2015 InvestorPlace Media, LLC
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3 Biotech Stocks That Could Pop in a Heartbeat – InvestorPlace
