![]() ![]() This dynamic offers an incredible opportunity in a compelling investment. This rising tide creates a bullish tailwind that will push the entire sector higher. When a stock breaks out, it's one thing. But if the entire sector is breaking out at the same time, the implications are magnified because it creates a rising tide, and a rising tide raises all boats. My excitement is compounded because the breakout on the KITE price chart is coinciding with a breakout in the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB), which is suggesting that the entire sector is ready to make a move. Breaking above this price level carries implications that are worth getting excited about. In order to accomplish this feat, Kite stock had to break above a significant level of price resistance. I have reason to believe that this lagging sector is now on pace to make a comeback, and it is one of the reasons why I am currently focusing on Kite Pharma Inc (NASDAQ:KITE) stock. The main reason is that Kite Pharma stock just forged a 52-week high, which is also a new all-time high. The bull market in equities is missing a key player, and that player is the biotechnology sector. KITE Stock: A Monster Move in the Making These two indications suggest a bullish move ahead. 07:13:21 Kite Pharma Inc NASDAQ:KITE KITE stock Kite Pharma stock Kite Pharma stock chart KITE pharma price chart KITE stock chart KITE price chart IBB ETF stock chart Kite Pharma stock (NASDAQ:KITE) broke out to the upside at the same time as a breakout in the IBB ETF. Click here to learn more.All Eyes on Kite Pharma Stock as It Breaks Out In it, growth investing expert Mike Cintolo recommends 10 of the market’s hottest stocks every Monday, with a goal of delivering fast profits in a short amount of time. Now, if you think you need a little help identifying which biotech stocks have the best charts, I’d suggest subscribing to our Cabot Top Ten Trader investment advisory. Combine the reasonable values, momentum derived from the Gilead-Kite Pharma deal and technical strength, and biotech stocks suddenly look like the best place to invest your growth investing dollars. ![]() And in a market in which sector rotation has been prevalent of late, biotechs are the latest sector to attract a wave of buyers. Look at the forward P/E ratios among the four largest companies in the sector by market cap, including Gilead:įor a sector that’s known for high valuations, those look like bargain stocks-at least on the surface. On a price-to-earnings basis, many biotechs are still cheap. For all its recent gains, the IBB still trades 21% below its all-time highs around 400 set two summers ago. With momentum on its side and technical barriers coming down, a sustained run could be in store for biotech stocks. And it’s now trading well above both its 25- and 50-day moving averages. From a technical standpoint, the IBB has already broken out, hitting a 52-week high. But one really good week could be enough to push biotech stocks into a more long-lasting rally. Going forward, biotechs can only get so much traction out of a single deal in the sector, however big or meaningful it is. For a biotech sector desperate for good news, it added up to the perfect storm for biotech stocks. It coincided with this week’s run-up in the market as a whole. By buying out KITE and its $32 million in annual revenue (and $10.2 billion market cap), Gilead became that much bigger.Īnother reason was simply the timing of the deal. With a $109 billion market cap (and climbing) and $28.5 billion in revenues over the last 12 months, GILD already had outsize influence on the biotech sector. So it’s clear that the Gilead-Kite Pharma deal has acted as a sort of wakeup call for the entire sector. Prior to that breakout, biotech stocks had been on a month-long decline, and had gone nowhere since a big jump in the first three weeks of June. Since the mega deal was struck on Monday, the iShares Nasdaq Biotech ETF (IBB) is up 5.6% as of this writing, compared to a 2.3% run-up in the Nasdaq. But it seems the ripple effect of the Gilead-Kite Pharma deal have spread to the entire biotech sector. Gilead Sciences (GILD) bought out Kite Pharma (KITE) for $11.9 billion this week, prompting huge gaps up in both biotech stocks. ![]()
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