Morning Preview: The Biotech Bubble Might Burst And Microsoft’s Surprising Strength

1.) Biotech has been one of 2014’s major themes. This year already, several biotech stocks have spiked 100% or more in a single day. @ReformedBroker shared a great post yesterday about this and it caught everyone’s attention. Is biotech a massive bubble ready to burst? The chart of the day is this one, which shows the largest biotech ETF, $IBB, at a paramount moment:

And here's the chart $IBB Note vertical line is start of the trend

— HCPG (@HCPG) Mar. 24 at 10:37 PM


2.) Biotech isn’t the only momentum sector rolling over. @Ivanhoff recently pointed that 4 of the most watched momemtum sectors are all down big since early March:

The 4 pillars of momentum under pressure: $IBB -biotech, $CQQQ -ChinaTech, $TAN -solar, $SKYY -cloud

— Ivaylo Ivanhoff (@ivanhoff) Mar. 24 at 03:45 PM


3.) Any stock that has the term “tech” in it is worth watching right now. Some of the largest Internet tech names like Twitter ($TWTR), Facebook ($FB), and Netflix ($NFLX) all dropped more than 4% yesterday. The Nasdaq-100 ETF, $QQQ, closed near an incredibly important level too:

$QQQ closing right near 50-day MA on high volume. This is def an area to watch the rest of the week

— David Fabian (@fabiancapital) Mar. 24 at 04:13 PM


4.) During times of market weakness it’s important to find relative strength. What stocks are holding up better than the rest of the market? In this case, Microsoft ($MSFT) should be on everyone’s radar. Microsoft is up 8% this year, and it’s outperforming both Apple ($AAPL) and Google ($GOOG). Imagine that:

Updated $MSFT chart from 2-3 weeks ago. Very interesting how strong this one has been standing

— Trader Stewie (@traderstewie) Mar. 24 at 03:13 PM

"@AnalystWire: UBS Raises PT on MIcrosoft ($MSFT) to $46; Sees CEO Nadella as 'Right Person for the Job'"

— Darcy Keith (@eyeonequities) Mar. 25 at 07:05 AM


5.) What are insiders doing right now? According to one index, which is compiled and shared by Thomson Reuters, they’ve been selling all year. Just look at the massive spike that happened in January. Luckily, the index appears to be making lower lows, but you should still be watching this if you think insiders are a good barometer of the market:

$spy, $iwm insiders haven't been interested in over a month now…still in sell mode..

— Marketguy (@Marketguy) Mar. 24 at 11:05 PM

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