Where Is The Current Bull Market? Scan Of Stocks Gaining Over 20% Over The Past Week Almost Exclusively Yields Biotech Names

Where is the current bull market? All indications would be that it's in biotech! The broader market is not really moving. There have been plenty of attention-grabbing headlines, and earnings season is upon us, yet the S&P 500 has been largely stagnant in recent trading sessions. Nevertheless, as Jim Cramer says, “There is always a bull market somewhere!” While Jim Cramer may not inspire a lot of confidence in many, this is actually a terrific quote. Therefore, if you are a bull, and you are looking to do some speculating in the coming days and weeks, the following stocks need to be on your radar. 

SPDR S&P Biotech ETF XBI 

The big moves in recent days have been taking place in biotech, so let’s take a look at the most efficient, diversified and liquid vehicle to play the sector as a whole. First, it is important to note that the biotech bull market goes back a month. This is not a longer-term trend at the moment, but it has been a powerful persistent move in recent weeks. Over the last 30 days, XBI has jumped a little over 7% and has accelerated dramatically to the upside over the course of the last five trading sessions, notching a gain of better than 8%. At the close of trading on Wednesday, XBI was sitting at new 20-day highs above $82.00 and would appear poised to maintain the strong momentum heading into the end of the week. 

A scan of stocks that have gained better than 20% over the last week, yields almost exclusively biotech names. The lone exception was Western Alliance Bancorporation WAL, which surged more than 24% on Wednesday after posting better-than-expected results and being added to Wedbush’s “Best Ideas” list. 

Let’s take a closer look at the big movers in this hot sector.  

Crispr Therapeutics AG CRSP

This will be the only foreign stock on this list. Crispr Therapeutics is a Zug, Switzerland-based biotech firm listed on the NASDAQ. Shares notched strong intra-day gains on Wednesday, continuing a rally in the stock that has been taking place over the last month, largely tracking the performance of the XBI. A look at the chart reveals that the next key level in the name will be $55.00 vs. Wednesday’s close of $53.48. In the very near term, CRSP has challenged this $55.00 level a number of times and has been unable to break above it. Traders should look for this level to be broken on heavy volume in order to confirm continued momentum. Over the last week, shares have soared 21%, including another 3% gain on Wednesday. Volume on the session was only slightly above average. The metrics that speculators should be focused on in the coming days are volume and the way the stock reacts to another test of $55.00 to the upside.  

Legend Biotech Corp. LEGN 

There’s been an interesting development for Legend Biotech this week – on Tuesday, after the close, results for the company’s myeloma joint-venture drug with Johnson & Johnson JNJ, Carvykti, were leaked online. The data was positive. RBC Capital Markets analyst Leonid Timashev wrote that Carvykti shows "unequivocally meaningful benefits over the standard of care, which we believe may work to ultimately position the drug not just as the preferred CAR-T, but as the preferred treatment option among physicians treating multiple myeloma patients.” 

The addressable market for this particular treatment may be as large as $9.6 billion, and this sent LEGN shares soaring on Wednesday, with the stock closing up nearly 20% to $62.50 on volume of around 9 million shares vs. an average volume of 600,000. On the surface, this would appear to be a strong catalyst that may continue to propel the stock in the coming days. The tailwinds in the sector as a whole may also drive increased bullish sentiment. Over the last five days, LEGN is up around 21%. Over the last month, the stock has risen more than 35%. These are new all-time highs in the name and LEGN should be registering on traders’ radar. 

Madrigal Pharmaceuticals MDGL 

This stock has started moving in a big way over the last week, registering a gain of 21% and closing above $293.00. Volume was lighter than average, however, on Wednesday and a confirmation of continued momentum in the name would be more persistent price gains on increasing volume. There is a very obvious technical level in MDGL that should determine the near-term fate of this stock with regard to performance. On December 19, 2022, Madrigal shared positive drug data that sent shares soaring more than 250%. Since that time, the stock has been range-bound and has been turned back at the $300 level repeatedly. A move above this technical level on heavy volume could lead to a continued significant rally in the name. This is a very compelling setup, and traders should add MDGL to their bull watchlist at the very least. 

Vaxcyte PCVX 

Vaxcyte, Inc. is a San Carlos, California-based biotechnology firm that has attracted the attention of Wall Street in recent months after a big pop in the stock last fall on positive data for the company’s pneumococcal vaccine. Shares traded around $45.00 into the early winter before pulling back in the Spring. In just the last week, however, PCVX has started moving again in a big way. The stock has climbed more than 31% over the last 5 trading sessions and has re-taken the $45.00 level once again, closing Wednesday’s session at $45.79. Volume was much heavier than normal with around 6 million shares trading hands versus a daily average of under 800,000. Back in December and January, bull moves in the stock lost momentum in the $46.00-$48.00 area. A further breakout would be confirmed if PCVX can get above this prior resistance level and continue to run on heavy volume.  

Revolution Medicines RVMD

Revolution Medicines has been riding the recent wave in the biotech sector and the technical setup in the name suggests the next couple of days could see a continuation of momentum. Shares have jumped almost 21% over the last five trading sessions, including a 3.75% gain on Wednesday which propelled RVMD to a close above its most recent trading range. Nevertheless, this is a volatile stock and we most likely won’t see confirmation of a lasting breakout in the name until we see a sustained move above $30.00. Nevertheless, the near-term resistance in RVMD is at $25.00 and shares closed above that at $25.18 on Wednesday. If RVMD can sustain above $25.00 in the coming days and is attracting above-average volume, a move back towards that $30.00 previous resistance level would appear likely. 

Ventyx Biosciences VTYX

This Encinitas, California biotech firm has made a huge move over the course of the last five trading days but is still down around 3% for the month. The stock took a rest on Wednesday, closing the session flat, but is up more than 26% over the last week. Volume was slightly heavier than normal, but there does not appear to be a compelling technical setup that goes beyond the very near-term bullish momentum. Nevertheless, the Street has a consensus price target of $57.25 for VTYX – compared to the current price of $36.63 – and the stock has already climbed 24% in 2023, although it has been a choppy ride with shares well-off previous highs above $45.00 seen in March. 

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