By Doug Busch
The biotech sector is facing a pivotal moment, after a frustrating year of stalled rallies.
A look at the widely followed industry benchmark SPDR S&P Biotech exchange-traded fund (ticker: XBI) shows just how frustrating price action has been for investors so far in 2025. The 200-day simple moving average -- a line which many professional traders use to determine the genuine health of the instrument -- has repeatedly acted as a stubborn ceiling. It has rejected the fund's advances throughout January, February, and now again in July, with the line trending downward.
Yet, technical signals offer bulls some hope: The ETF has seen a series of higher lows since early April and the current retest of a breakout above a short-lived cup base formed between June and July. Biotech's next move from here could set the tone for the rest of the year.
The SPDR S&P Biotech ETF traded at $87.20 Wednesday.
Specific winners within SPDR S&P Biotech could help the fund break higher. While the sector often splits between leaders and laggards, top names typically rise above the rest.
Amgen stands out as a megacap powerhouse, combining solid dividend yield north of 3% with compelling growth potential.
On the daily chart, the round-number 300 level acted as resistance through April, June, and July, until a decisive 3.3% breakout on July 22. The stock has since pulled back gently, forming a handle, setting up a clear entry point above the $311.38 pivot.
Amgen traded at $303.78 Wednesday.
Insmed, a biopharmaceutical specialist in rare diseases, is stealing the spotlight in 2025 with a stunning 62% gain, especially against the backdrop of XBI's 14% decline.
The daily chart shows a massive 29% gap up on June 10, triggered by positive data on its hypertension drug, followed by a steady climb higher. Now sitting near 25-year highs, Insmed has comfortably held above the very round $100 number and is trading right at a cup-with-handle pivot at $105.45.
With momentum on its side, this one looks poised to push toward the $140 mark by year-end, from its most recent level of $105.19 Wednesday.
BridgeBio Pharma, a genetic disease specialist, is off to a blockbuster start in 2025, surging 69% year-to-date.
The weekly chart highlights the power of long-term base breakouts, proving the old market wisdom true, "the longer the base, the greater the space." This speaks to these moves being more prone to success and they tend to be powerful when they occur.
Having just cleared a key cup base pivot at $44.42, formed since late 2023, the stock looks set for a strong run, with upside potential toward the $65 mark by year-end.
BridgeBio Pharma traded at $46.26 Wednesday.
Write to Doug Busch at douglas.busch@barrons.com
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(END) Dow Jones Newswires
July 30, 2025 12:37 ET (16:37 GMT)
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