06Apr10:49 amEST

A Hidden Camera on Bears

Despite a soft open, easing the presumptive gains implied by the futures market overnight, bulls are holding serve into mid-morning. 

Moreover, biotechnology issues continue to outperform, with IBB breaking to multi-month highs as we speak. At issue is whether this rotation down is simply keeping shorts honest until the next meaningful break lower this year, or instead a bonafide bottom before a new bull run commences. While the jury is still out on that topic, biotech bears surely must feel like they are being filmed with a hidden camera, as there are few spots to hide from the vast array of short squeezes. 

While the overall charts for most biotechs remain damaged and are not desired swing longs, several are still ripe to play catch-up while simultaneously squeezing shorts. 

Spark Therapeutics, Inc. is once such example, seen below on the daily timeframe. ONCE remains in an overall downtrend, but may be knocking out a short-term low. The stock is a classic low float/heavily-shorted name and is currently extremely dangerous to be pressing down here. 

Of course, plenty of broad market cautionary signs are still in place, including the weakness in transports today. But biotech bears should not be counting on that to avoid some pain in biotech, even if this squeeze eventually unravels later this year. 

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