The indices have been slowly drifting lower after a gap up open. Early breadth was around 3 to 1 positive but its now down to around 4-3 positive. New highs and new lows are about even.
While it isn't bad action, it is dull and lackluster. The bulls are not producing much positive momentum but the bears are doing an even worse job of producing negative momentum. What this looks like is the sort of action you'd expect when seasonality is negative. There isn't any major news flow driving the momentum, but there is still sufficient interest to prevent a downtrend from taking hold.
One of my favorite groups this year has been biotechnology. There has been some great trading in the sector but over the past week the group has dropped around 3.6% and I'm seeing a number of names hit support levels. I tend to focus on buying strength rather than weakness but I have positions in a number of biotechnology stocks which I intend to build as the charts develop.
I've mentioned many of these previously but here are the biotechnology names on my bottom fishing list right now:
HTG Molecular Diagnostics (HTGM) , Zogenix (ZGNX) , Kala Pharmaceuticals (KALA) , Sarepta Therapeutics (SRPT) , Viking Therapeutics (VKTX) and CLPS Inc. (CLPS) .
The key to these stocks isn't to rush out and buy them but to put them on the radar and track them as they develop. Most of them have near term catalysts that should create some anticipation at some point, but the technical action is poor for most of them and it isn't prudent to hold big positions at this time. I suspect that a number of these will do well into the end of the year.
