Like an old coffee percolator biotech stocks are boiling ready to reach the required strength for a breakout.
This past weekend the family took a ride up to our in-laws cottage up north for Memorial weekend. My up north trips with my father in-law are usually educational, a master craftsman and just downright intelligent. He’s the History channel, Discovery and This Old House all wrapped into one. He never wastes an opportunity to tell you the history behind something or how it works. Typically these are lengthy in depth, soup to nuts conversations on just about anything that comes up.
On Sunday we were trying to run electric to the other side of his work barn. As we were hanging wire my father in-law turns and asks me what the wire is called. I quickly and proudly say that is Romex, thinking that would be the end of the quiz. He then asks me how it got its name (blank stare). For the next 5 minutes he pontificated about the history behind the romex wire. Mind you, most would fall asleep, but I love these history lessons.
Later that evening, he was showing me how his brand new coffee maker worked, when he then took the opportunity to walk me through the history of the coffee maker. ”Do you remember the percolator” he says. That’s like asking me if I remember what its like to ride in a horse buggy. Not quite but I remember the Atari and my Coleco Vision. I then got a lesson on the mechanics of how a percolator worked. The gist is that most operate on the simple principle that the rising bubbles will force the liquid up a tube that then sprinkles over the coffee grounds.
So like the old percolator the $IBB appears to be boiling, ready to rise to make great tasting coffee.
First the Percolator: (IBB) Ishares Biotech (thumbnail – click to open)
I am going to call 110.50 as the breakout.
And the coffee grounds waiting for the breakout? Here is a list of high relative strength stocks. They were ranked against a list of all other biotech stocks, not the market, so these are the best in the biotech space currently.
BIIB, ALKS, REGN, VRTX, PDLI
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