Last July, when things seemed like they couldn’t get any better for biotech stocks, we analyzed Gilead (GILD - Get Report) and the NYSE Arca Biotech Index using the objective decision support engine. The warning was clear: Investors needed to exit the biotech sector because it was about to crash. Now, however, opportunity seems to be knocking in many of these battered stocks.
First, let’s survey the existing damage. From its July peak at more than 4400, the NYSE Arca Biotech Index recently fell to around 2600. That’s a crash of 41%. While Gilead fell “only” about 33% from its high last summer to its recent low, another well-known biotech stock, Biogen (BIIB - Get Report) has seen its market cap nearly cut in half.
