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Biotech ETF Hits Key $300 Level for the First Time in 9 Months

Friday, September 23, 2016 6:09
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(Before It's News)

The world’s largest biotech etf, the iShares NASDAQ Biotechnology Index (NASDAQ:IBB), closed above the $300 level yesterday for the first time since January.

The IBB, which holds many of the biggest and most well-known biotech stocks, counts over $7.6 billion in assets under management. That makes it not just the largest biotech-focused fund, but the second largest Health & Biotech ETF overall.

Investors have been flocking to biotech plays over the past few months, following a big downturn for the industry last year. Price gains for biotech stocks have been fueled largely by a flurry of M&A activity that really took off during the summer.

The result of the upcoming presidential election could be an inflection point for IBB and other biotech funds, because Hillary Clinton has made it no secret that she’d look to rein in drug prices. Meanwhile, Donald Trump is expected to oppose any further regulation of the industry if he’s elected.

The IBB at $300 is a key psychological level for investors here, but it’s also a technical battleground. As you can see in the chart below, IBB had flirted with $300 a couple of times last month, but was unable to break through higher. Another failed breakout would likely lead to another pullback, while sustained gains above $300 could lead to the next technical leg up around $330 or so.

IBB-2016-09-23

IBB shares fell $1.06 (-0.35%) to $299.02 in premarket trading Friday. Year-to-date, IBB has still fallen 11.31%, but is up nearly 25% from its late June lows.

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