A big gap-up open this morning probably would have attracted some selling by trapped bulls so it is good thing it has started slowly and is now gaining strength after some brief hesitation. Breadth is quite good at better than 2 to 1 positive but we only have about 30 new 12-month highs which illustrates the level of damage that has been done lately.
Biotechnology is the leading group this morning and that has been my main focus with bottom fishing recently. My Stock of the Week, Sangamo Therapeutics (SGMO) is showing signs of forming solid support and Sarepta Therapeutics (SRPT) is benefiting as a potential takeover target in the biotechnology group.
I have my eye on a number of other small biotechnology names that are drifting right now and not done much. Ocular Therpeutix (OCUL) , Clearside Biomedical (CLSD) , HTG Molecular (HTGM) and Aimmune Therapeutics (AIMT) are a few that I am watching.
Whether this market continues to bounce is going to depend a great degree on the FAANG names. There looks to be some growing support there and if that can build a bit more it bodes well for continuation of this bounce.
One good thing right now is that the level of confidence in a bounce is quite low. The longer the indices hold up then the more likely buyers will inch in. I'm focusing on some selective stock picking and am staying skeptical of the overall market.