The biotechs have had a remarkable resurgence this summer led by the best and biggest names like Gilead Sciences, Celgene, Amgen, Biogen-Idec and Regeneron. This group was just hammered mercilessly in the spring but has come back strong to lead the markets once again, much like it did last fall.
While the big names seem obvious to lead the charge when the sector is making a run, it’s the secondary names that often provide a more robust return before the run comes to an end. One of these names is a little-known Bay Area firm called Biomarin (BMRN). This company has some strong drugs in the discovery pipeline and has been sought after by several big European phamaceuticals companies. Last year, I profiled the stock on Mad Money with Jim Cramer and again in this article before it ran to all time highs in the 80’s.
Biomarin’s technicals and chart are in a great place, with the inverse head/shoulders pattern now broken. This projects up to where the resistance area lies, around 77 or so. However, this stock may not stop there. Note the very strong relative strength and overbought momentum indicators. Price has not quite caught up here with the indicators, which tells me there is some upside left. We put on an October 70 call for a recent option trade.