You missed one however, the latest winter top
Yes, that is correct, there was no washout. So, one could say the ultimate move to the top, from the last washout was 16 months, counting from bull confirmed status in May98.
The weekly chart looks like death however. Your stats including the % rise would show that the last rise went far higher than all the rest- hence there is more downside risk
I have a theory about why that happened. Prior to the 1999 blastoff in biotech, the sector underperformed, as Mo Mo investors had no patience for the long product cycles. The Mo Mo money flowed into the telecom/wireless/optical/internuts. During this time significant progress occurred in the biotech sector. When the inflated internuts were being distributed, the proceeds were being put to work in the untrusted biotech sector. The sector then became the object of adoration of the Mo Mo investors (bubblelicious). The Clinton/Blair comment knocked the wind out of their sails and the sector is reverting to mean. I think there are important drugs in the pipelines of some of these companies. IMO that is where the good investments lay. The average investor has a hard time judging which drugs are going to be important (big sellers) because its pretty complicated. Rather than learn chemistry, pharmacology, disease mechanism and a host of other factors, people rely on the sell side for insights. If you can figure out which companies have potential blockbuster drugs, it will be worth the "high" prices paid for these companies with "no earnings". As we know from bristol myers this week, big does not mean better results in the clinic. We're all carrying the same risk of failure once clinical trials begin. That aspect is very unpredictable. While there may be some more downside price action on these stocks, the bottom is at hand. Perhaps it will be the 200 day moving average, I don't know. But, I think I will be able to identify it when it happens (at least on individual issues I am following). I don't anticipate a bear market in these issues (unless they have failures in the clinic). |
