Biotechs Could Rocket Higher in 2020: Chart
I’ve got some bad news for you…
You’d have been better off putting all your money in a big, boring name like Apple or Procter & Gamble over the last year than owning a typical biotechnology stock.
(Don’t worry, there’s good news too. Just wait…)
Few folks realize it, but between the middle of 2018 and the middle of last year, the average biotech stock shed about 20% of its market value…
Meanwhile, the S&P 500 was in positive territory over the exact same time frame.
Winning consistently in biotechs over the last couple of years has taken a ton of stock-picking acumen — otherwise, big winners were, on average, met with even bigger losers.
But a shift is happening — the biotech sector is closing in on a major breakout level right now.
In fact, one simple chart points to an explosive rally in the biotech sector this year!
And you could have a big opportunity to ring the cash register in 2020 as a result.
Have a look at the five-year stock chart below. It shows the price performance of the SPDR S&P Biotech ETF (NYSE: XBI), a popular fund that tracks the performance of a huge basket of 123 biotech stocks, small and large.
You can pretty much think of XBI as “the biotech sector.”
Something big is happening here:
After a tumultuous couple of years that unwound the long-term rally that kicked off back in 2016, XBI is back within spitting distance of all-time highs just below the $100 level.
Let me say that one more time for emphasis: Biotechs are testing record highs.
That’s a very big deal for investors because it means that significant upside could be in store in 2020.
Consider this: As of this writing, the whole biotech sector is only up about 6% from its highs in the middle of 2015. So over the course of almost five years now, this sector has mostly moved sideways.
But the rest of the S&P 500 is up 70.5% over that same period!
That leaves a lot of room for biotechs to make up for lost time. A push to new record highs for the biotech sector sends a clear signal that bulls have finally regained control of this important market.
The old saying goes that a rising tide lifts all ships. Well, a breakout in the sector could provide a tailwind that pushes virtually all biotechs higher in 2020 as a result.
And that starts with a push above 2018’s high-water mark in the weeks ahead.
Stay tuned. We’ll be watching this space very closely.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily