New Bullish Signs From Biotech

A huge biotech upswing may be in the making... [Wealthy Retirement]( SPONSORED [This NEW Electric Vehicle Stock Could Help Fund Your Retirement]( Its car is faster than super-cars like Ferrari's F8, McLaren's 720S and Porsche's 911 Turbo. Yet it's 100% electric. [Discover the new $25 startup that could be the next EV giant.]( Editor's Note: Time's running out to register for the FREE, virtual [Oxford Investing Games]( taking place at 1 p.m. on Wednesday, October 27! Hosted by Chief Income Strategist Marc Lichtenfeld, this trivia game show is designed to clue members in on a sector going absolutely gangbusters... Marc will reveal his expert advice in this sector as he rewards your correct answers with chances for prizes - including one worth $10,000! All you have to do is register, tune in and submit answers to Marc's trivia questions through a live chat room. You don't even have to stand at a podium, hit a buzzer or show your face on screen! This free, virtual event is open to anybody who is interested... [Click here to register!]( - Kyle Wehrle, Assistant Managing Editor [BIOTECH STOCKS]( How to Determine the Next Big Biotech Move Marc Lichtenfeld, Chief Income Strategist, The Oxford Club [Marc Lichtenfeld] My career has been what you might call "nontraditional." Very few Wall Street analysts spent their early 20s doing theater in Greenwich Village. When I started teaching myself about investing - just because I was a struggling actor didn't mean I had to be a starving actor - I learned how to read financial statements and analyze companies (fundamental analysis). Then, when I started trading, I studied price action (technical analysis). After a few months at my job as a fundamental analyst with the most contrarian research firm on Wall Street, I was approached by my boss, who'd heard I knew about technical analysis. Imagine my surprise when he asked me to start writing a technical analysis note for clients every morning. Since then, I've always used technical analysis as a timing tool when looking at a stock or sector. Today, I'm shining my technical analysis light on the biotech sector. The biotech sector can be volatile. Biotech stocks can have big swings depending on earnings, clinical trial data or regulatory approvals. Over the past 10 years, the sector has outperformed the overall market. The sector, as represented by the iShares Biotechnology ETF (Nasdaq: IBB), is up 407% while the S&P 500 has gained 352%. [Biotech Has Outperformed the Overall Market]( Recently, however, the sector hasn't been great. Since hitting a high of $177.37 in August, the biotech exchange-traded fund (ETF) is down 11%. Meanwhile, the S&P 500 is up 2.5% over the same period. Despite the recent drop in the biotech sector, I like its technical setup. Shown below is a weekly chart going back three years. It shows the performance of the ETF up close. [iShares Biotechnology ETF Is Showing Signs of Uptrend]( You can see that the iShares Biotechnology ETF has made higher highs and higher lows, an important feature of an uptrend. Furthermore, the reading on the bottom of the chart is a technical indicator called a stochastic oscillator. It is a measure of momentum. Whenever stochastics hit 20 (like the instances circled in blue on the chart), the stock is considered oversold. You can see that over the past three years, practically every time stochastics neared 20, the ETF rallied. SPONSORED [Get Marc's Top 5 Dividend Stocks (FREE PICKS)]( World-renowned income expert Marc Lichtenfeld just released his [Ultimate Dividend Package](. Inside, you'll find his TOP FIVE dividend stocks right now. And today, he's giving you this package... completely free of charge! To get your FREE dividend recommendations, [click here now](. Today, stochastics are very oversold and starting to turn higher, which suggests a move higher is imminent. Lastly, the 50-week moving average is at $158.58. The moving average has acted as [support and resistance]( in the past. As a refresher... Support: An area where a stock stops moving lower. Resistance: An area where a stock stops moving higher. [Click here to learn more about support and resistance.]( When a security crosses its moving average to the upside, that is a very bullish sign. If we drill down to the one-year daily chart, shown below, you can see stochastics have already turned higher and the ETF is up against a 200-day moving average. Similar to the 50-week moving average, it acts as support and resistance. [Stochastics Have Already Turned Higher]( Seeing as the two moving averages are close to the same price, if the iShares Biotechnology ETF trades at around $165, that is a break of two important areas of resistance (its two moving averages). That indicates the price will continue higher from there. The top three holdings in the iShares Biotechnology ETF are Amgen (Nasdaq: AMGN), Moderna (Nasdaq: MRNA) and Gilead Sciences (Nasdaq: GILD). But once the ETF crosses over those two moving averages, it's game on for the entire sector, not just the top stocks in the ETF. Use your research skills to find great companies and stocks you want to invest in, and then use technical analysis to better time your buys and sells. It's not a traditional way of investing, as most investors use only one of those two methods. But when it comes to investing, I've never been very traditional. 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