Biotech (XBI): Emerging Long/Overweight Opportunity

Conclusion, Investment Implications, Strategy

The SPDR S&P Biotech ETF (XBI) is currently testing and rebounding from minor support at 86.54 amid new monthly asset expansion and quarterly relative outperformance versus the benchmark S&P 500. As long as these positive factors remain true , this sets up an emerging low-risk opportunity to buy XBI and the Biotech-related stocks it represents.

Current Sector & Industry Group Ideas

Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.

Table 1

Click the table to make it larger

This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.

Analysis and Rationale

The upper panel of Chart 1 below plots the SPDR S&P Biotech ETF (XBI) daily since October 2023 with its 200- and 50-day moving averages, widely-watched major and minor trend proxies. The bent green arrow points out that XBI is currently testing and rebounding from its blue 50-day MA, currently at 86.54, which suggests the current mid-November minor uptrend is still intact and is resuming.

Chart 1

The middle panel plots the corresponding total net assets (AUM) invested in XBI with their 21-day moving average, the latter to identify the monthly (our Tactical timeframe) trend of expansion or contraction. The green arrow points out that these assets are rising back above their 21-day MA as of Feb 8th, which suggests an emerging new trend of monthly expansion. Expanding assets indicate investor conviction in higher prices.

The lower panel plots a corresponding chart of the daily relative performance between XBI and the S&P 500 (SPY) with its 63-day moving average, the latter to identify the quarterly (our Strategic timeframe) trend of relative outperformance or underperformance. The green arrows highlight that XBI is currently testing its Nov 30th trend of quarterly relative outperformance versus the S&P 500 (SPY).

Together, these metrics suggest a Tactical decision point for XBI from a trend, asset flows, and relative performance standpoint — and a potential new relative low-risk Tactical long/overweight opportunity,

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Biotech (XBI): Emerging Long/Overweight Opportunity

Conclusion, Investment Implications, Strategy

Current Sector & Industry Group Ideas

Analysis and Rationale

Asbury Research

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and updates to our quantitative models

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Biotech (XBI): Emerging Long/Overweight Opportunity

Conclusion, Investment Implications, Strategy

Current Sector & Industry Group Ideas

Analysis and Rationale

Asbury Research

Asbury Research subscribers get more detail on our latest analysis, and updates to our quantitative models

Schedule A 15-Minute Zoom Meeting With Us To Get More Information >>>

Asbury Research subscribers get more detail on our latest analysis,
and updates to our quantitative models