XLV Gained Momentum on Strong Market



XLV gains momentum

On November 18, 2015, the markets turned bullish on the back of the Fed’s meeting minutes that strongly indicated a possible rate hike in the next Fed meeting. The Dow Jones Industrial Average rose by 1.4% while the S&P 500 also reflected a similar performance by gaining 1.6% for the day. Biotechnology stocks moved along with the market and also made impressive gains across major ETFs. The iShares Nasdaq Biotechnology ETF (IBB) rose 2.9% while the Health Care Select Sector SPDR ETF (XLV) rose 2.0%.

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XLV majorly accommodates big-caps and mid-caps. The ETF had a good day as the stocks were more or less positive. In particular, 54 stocks out of 55 ended up giving positive returns, while only one stock ended up in red. XLV closed at $72.1 and moved ahead of the 100-day moving average. The ETF is also trading above the 20-day and 50-day moving averages. The ETF witnessed a rise in trading volumes, with ~12.8 million shares exchanging hands.

The graph above reflects the performance of XLV compared with SPY. Both XLV and SPY remained flat in November so far. Since the beginning of November 2015, XLV returned 1.1%, while SPY returned 0.45%.

Biogen gains 4.5%

Biogen (BIIB) followed the market trend and gained 4.5% on high trading volumes. The stock witnessed trading volumes of ~2.25 million shares as compared to the five-day average trading volume of ~1.95 million shares per day. The stock closed at $291.98 and was trading above the 20-day and 50-day moving averages, but below the 100-day moving average. BIIB’s RSI (Relative Strength Index) is at 42, indicating that the stock is neither overbought nor oversold. BIIB has a trailing-12-month price-to-earnings ratio of 19.07x. BIIB has a book value of $47.43 and at the current price, the stock is trading at a price-to-book value ratio of 6.16x. Finally, BIIB has a weight of ~2.75% in XLV’s portfolio.

The other stocks that performed well include Allergan (AGN), Celgene (CELG), and Gilead Sciences (GILD). They gave returns of 4.6%, 4.2%, and 3.5%, respectively.


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