Breadth is running around three to five negative Wednesday morning, but there are 160 new highs to just 70 new lows, and there are some pockets of momentum. Biotechnology, for example, is exhibiting some relative strength and the FATMAAN names bounced back from a weak start. Growth stocks such as those held by Ark Innovation ETF (ARKK) are doing well.
During bear markets, stock-picking doesn't matter as much as stocks are much more likely to move in tandem. However, this has been a rotational bear market, with many stocks declining while the indexes hold up quite well. That allows for more focus on stock-picking, but the sector rotations can be vicious.
One of the worst-performing groups since February 2021 is biotechnology. Most of the charts in the sector show bounces off lows, but there are a few with very good relative strength that are catching my eye.
One of them is Veru, Inc. (VERU) .
VERU struggled for a long time as it was mostly viewed as the developer of the "female condom," but it has recently advanced sabizabulin, which is used to treat high-risk hospitalized patients with Covid-19. The company had very successful phase 3 results and has applied for Emergency Use Authorization with the FDA.
Five analysts have 12-month targets on the stock ranging from $24 to $55. Wednesday morning the stock is trading around $15.50.
The main reason I like this stock is the chart. This is triple top, and I am looking for some consolidation before VERU tries again for a sustained breakout.
There aren't many charts of this type outside of oil right now, but this is what bull market action tends to look like.