Can Forgotten Biotech Break Out?

After a 50%+ run from lows last April through highs in mid-January, the Biotech group has been trending sideways over the last few months.

Biotech hasn't garnered much attention lately, with all the coverage of the Iran War and the AI Doom trade that's been taking down software stocks even as AI infrastructure stocks continue to surge.

Below is a look at the iShares Biotech ETF (IBB), both recently (last 12 months) and over the long-term (since 2010).  What we see is a group trading sideways right now at a key inflection point.

In the short-term, IBB has just managed to re-take its 50-day moving average, but it needs to break out to new highs to resume the uptrend that was in place last year.

Looking longer term, IBB's rally in the last year ran out of steam at the same level it stopped at back in late 2021 before the broader market entered a nasty bear market.

Putting the short-term and long-term together, if Biotech manages to break out to new highs at some point this year, it would clear a significant resistance hurdle and open the door up for another big leg higher.

If new highs can't be made soon, the double tops from earlier this year and late 2021 will loom large in the minds of traders.