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The charts show biotech could still break higher

As political pressure appears to mount on biotech stocks, some technical analysts say the foundation for a bounce may be building.

“What I’m seeing is a basing situation here that I think by year-end could trade up to $340 or beyond,” said John Kosar, director of research at Asbury Research.

The iShares Nasdaq Biotechnology ETF (IBB) traded near $287 a share midday Thursday, up slightly on the day but down roughly 15 percent for the year so far.

The ETF is also about 25 percent below the all-time intraday high of $400.79 reached on July 20, 2015, as the biotech stocks have been hit by a slew of concerns about high valuations and political rhetoric against high drug prices and corporate deals.

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Asbury Research subscribers can access the reports and accompanying charts used as a source for this article, as well as our current stock picks, by logging into the Research Center.

Interested investors can learn more about Asbury Research’s unique perspective on the US financial markets by listening to Chief Market strategist John Kosar’s August 18th Interview by Jim Puplava of the Financial Sense website.