Are Biotech Stocks Starting to Break Down Again?

biotech stocks

In the video below I focus on the biotech stocks. I look at two key ETFs…the Nasdaq Biotech ETF (IBB) and the S&P Biotech ETF (XBI). I then look at the top 5 holdings of the XBI.

I’ve looked at IBB many times but really haven’t looked at XBI.  They are two different animals and give you exposure to biotech stocks in different ways.  IBB is cap weighted and has some big names like Amgen (AMGN), Biogen (BIIB), Gilead Sciences (GILD), Regeneron Pharmaceuticals (REGN) and Celgene (CELG). These top 5 holdings make up about 35% of all the holdings in IBB.

XBI is more of equal weight ETF with the top 5 stocks accounting for just 12.5% of the holdings. The top 5 are: are Alnylam Pharmaceuticals (ALNY), Exact Sciences (EXAS), Puma Biotechnology (PBYI), Seattle Genetics (SGEN) and Sarepta Therapeutics (SRPT).

Biotech stocks can be very volatile and provide amazing returns followed by breathtaking corrections. If you are on board one of these stocks just know when and how you will exit.

In today’s video I also review the Dow Jones Industrial Average (DJIA) daily and weekly charts.

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