Bret Jensen's Biotech Mailbag

It has been a slightly down week for the market so far. Today we have one of the four 'quadruple witching' days of the year. This can and probably will bring some increasing volatility into equities to close the week. Here at the Biotech Forum we close out our week by going to the 'Biotech Mailbag' to answer two of the common questions we have received so far in March.

What will it take for biotech to break out?

The main biotech indices are near highs they have not been able to decisively break above since late 2015. This was approximately half way through a bear market that took the sector down some 40% from peak to trough. The sector has had a decent 2018 to date but is once again just below what have been strong resistance levels. Since I don't see a big rally in the cards for the overall market, something specific will have to happen for this high beta part of the market to finally break through its current ceiling. In my view, that would have to be the return of M&A across the industry. We had a good start to the year with some $30 billion of deals announced in the first five weeks of the year, but deals have been largely dormant since. Until we see transactions picking up again, the sector could remain in a trading range....323 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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