Along with Semiconductors, the Biotech sector looks poised to outperform the Nasdaq 100 in the coming years. Specifically talking about the iShares Nasdaq Biotechnology ETF that is weighted to large cap biotech stocks (Celgene, Biogen, Gilead, Amgen, etc).

The biotech sector saw gains of over 300% when it broke out of a downtrend against the Nasdaq 100 in 2011 (surging 333% from 30 in 2011 to 130 in 2015). The biotech sector peaked in 2015, and was in a downtrend against the Nasdaq 100 until breaking out again in mid 2018.

When we look at IBB’s nominal chart, we see a possible Cup and Handle forming with a potential price target of 170, which is 54% higher than the current price of 110. Need to see a breakout around the 120 level to validate the pattern and price target. -Harry