Pharma stocks in a positive trend
The pharmaceuticals subgroup consists of 62 stocks in the iShares Nasdaq Biotechnology ETF (IBB). 75.81% of these stocks are trading above their 100-day moving average, 83.87% are trading above their 50-day moving average, and 79.03% are trading above their 20-day moving average. The subgroup’s benchmark index, IBB, is also trading above its 100-, 50-, and 20-day moving averages.
The below chart indicates the percentage of stocks that are trading above their 100-day and 20-day moving averages on a week-over-week basis. The 100-day moving average is considered a good measure for medium- to long-term investment. The 20-day moving average is considered to be a good measure for a short-term investment.
The moving average trend indicates that the prices are trending upward along with the IBB and the broader market index SPDR S&P 500 ETF (SPY).
In the 100-day moving average section, 11 more stocks have moved into this zone for the week ending July 17 in comparison to the week ending July 10. Some of the stocks that moved into the 100-day moving average zone are MannKind (MNKD), Jazz Pharmaceuticals Public Limited (JAZZ), and Alkermes (ALKS).
The upward trend in the pharmaceutical sector for the week ending July 17, 2015, was not caused by the oversold or overbought condition. This is further supported by the indication of the 14-day relative strength index (or RSI). Out of 62 stocks within the pharmaceutical group, 43 stocks are neither oversold nor overbought. The upward momentum in the pharmaceuticals sector was driven by news about the fundamental drivers.