3 Biotech Stocks on the Verge of an Overdue Run (AMGN, GILD, REGN)

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biotech stocks - 3 Biotech Stocks on the Verge of an Overdue Run (AMGN, GILD, REGN)

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Biotech stocks, once the belle of the ball, have been relegated to the back room in recent months, but their fortunes may be about to change.

3 Biotech Stocks on the Verge of an Overdue Run (AMGN, GILD, REGN)

Last week saw some of the best rotation into the biotech space in a long while. Friday’s high-volume pop served as an exclamation point on the comeback, demanding stock watchers everywhere take note.

The popular iShares Nasdaq Biotechnology Index (ETF) (IBB) cleared the 50-day moving average for the first time this year and is now sporting a solid looking bottoming pattern.

While most other sectors are far from key support levels and arguably at higher risk entry points, many biotech stocks have plenty of room to run if the bottoming action continues to play out.

Here are three top biotech stocks to buy.

Biotech Stocks to Buy: Amgen, Inc (AMGN)

AMGN
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Source: OptionsAnalytix

Amgen (AMGN) has turned a corner in recent weeks, and since early March the price action has been healthy as a horse.

The selling pressure on down days has been muted, while up days have been accompanied by heavy volume. With the price now solidly above the 20- and 50-day moving averages, the bulls have finally wrested control for the first time this year.

If the rotation into biotech stocks persists, look for AMGN stock to return to resistance at $165 in the months ahead. Options are cheap, so consider snatching up some calls here, specifically the AMGN July $155 call for $7.

Biotech Stocks to Buy: Gilead Sciences, Inc. (GILD)

GILD
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Source: OptionsAnalytix

Gilead (GILD) boasts a chart similar to AMGN — stabilization following a multi-month slide. Selling pressure has dried up, allowing GILD stock to base out in a narrow range. GILD popped above its 50-day moving average in late-March and hasn’t looked back since.

Traders who missed the first breakout over $91.30 are now being granted a second opportunity.

Monday’s pop over $94.50 is generating another trade-worthy breakout. The century market should act as a magnet, giving GILD about 5% upside from here before any significant resistance levels come into play.

Buy the GILD June $95 call for $4.10.

Biotech Stocks to Buy: Regeneron Pharmaceuticals Inc (REGN)

REGN stock
Click to Enlarge
Source: OptionsAnalytix

Regeneron (REGN) rounds out our list. Before Friday, REGN was on the verge of an ugly breakdown. Then news hit the wires on positive eczema drug results that sent the biotech stock into the stratosphere on heavy volume. The one-day pop carried shares from support to resistance in one fell swoop.

REGN stock is now above the 50-day moving average and could be setting up a breakout play. Watch the $415 level in the weeks ahead.

Ideally, REGN will consolidate a bit here to digest Friday’s gains before taking out resistance in an effort to fully turn its trend.

Unfortunately, REGN options aren’t all that actively traded, so consider snatching up shares on a breach of $415 in the days ahead.

At the time of this writing Tyler Craig had no positions on any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/04/biotech-stocks-amgn-gild-regn-ibb/.

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