Biotech stocks have quietly been among the strongest areas of the market for well over a year.
And now, the story appears to be evolving.
Money isn't just flowing into the larger, established biotech names anymore. It's beginning to move further out on the spectrum toward earlier-stage companies, where the upside potential can be substantial if the trend continues.
That's what has my attention right now.
One way to track that theme is through the Biotech Clinical Trials ETF $BBC.
These are companies developing and testing the next generation of drugs and therapies, with many still in the clinical trial stage.
That's what makes this corner of the market so spicy.
The potential rewards can be enormous when a company delivers successful trial results.
And right now, investors appear increasingly willing to embrace that risk.
The price action reflects it.
The ETF is breaking out to fresh multi-year highs.
Take a look at the chart:
Price is now pushing through its 61.8% retracement level, suggesting a new leg higher may already be underway.
I think a move back toward the 2021 highs is a reasonable objective if this breakout continues to gain traction.
The team just published a deep dive into the biotech space, highlighting some of the most attractive risk/reward opportunities we're seeing right now.
So, are you in for biotechs? I definitely am. Let me know which names are on your radar.
Stay sharp 😉
Alfonso De Pablos, CMT
Director of Research, All Star Charts
P.S. Before you go: Steve Strazza is going live Thursday at 1:30 PM ET to break down one of the strongest periods in the four-year market cycle and how he's positioning for it.
