When I was going through my charts this week, this is one of the ones that stood out the most. I see Biotechnology, on both an equally-weighted and cap-weighted basis, breaking out of major bases.
More specifically, if you look at the Cap-weighted Index Fund $IBB, we're talking about half a decade of no progress. It looks to me like this is all changing now:
Click on Charts to Zoom in
Look at Biotech relative to the rest of the stock market. Again, I'm seeing a half-decade long consolidation resolving higher:
Look how clean this chart below of $XBI is. This is the equally-weighted Biotech Index fund breaking out of a 5-year base to new all-time highs. Then, achieving its price objective near 120, consolidating further, and now starting its next leg higher, in my opinion.
Our target in $XBI is 167 and this is a group we want to own if it's above 120:
So when it comes to "owning the space", I know a lot of Financial Advisors and Investors just stop there and own the fund. And that's great. We all have different objectives, goals and risk tolerance. It's important to identify them.
For me personally, I like to take it one step further and own the components themselves.
"If you trade the averages, you get average returns", is how I learned it.
So I prefer to own individual equities. Again, there's no right or wrong way. It just depends on what you're trying to accomplish.
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