While biotech shares have been pressured of late, this fund is entering its historically best season. Buy on dips.
iShares Nasdaq Biotechnology ETF (IBB)
from Stock Trader’s Almanac
Biotechnology sector enters its historical favorable season in August. iShares NASDAQ Biotech (IBB) could be bought on dips below $112.00. Maintain the existing stop loss at $100.27. The auto sell is $141.31 based upon historical average performance and the new buy limit. A 14.7% average gain has occurred over the last 15 years while an average gain of 18.3% has taken place the most recent 5 years.
Top five holdings are: Biogen, Gilead Sciences, Amgen, Celgene and Illumina. This sector has been slowly recovering since falling from grace in mid-2015. Prescription drug prices are in the spotlight, but this sector has the potential to cure disease, not just treat symptoms.
IBB is an existing position in the portfolio that is being held for its historical track record of performing reasonably well during the “Worst Months,” May through October. If IBB trades below its buy limit we will officially add to the existing position. If you currently do not own a position in IBB, it can be considered on dips below its buy limit of $112.00.
Jeffrey A. Hirsch, Stock Trader’s Almanac, www.stocktradersalmanac.com, 800-762-2974, August 2, 2018