Formulate a Battle Plan for This Sector

Bulls still have more work to do to prove that equities have, by and large, concluded their recent pullback. 2120 on the S&P 500 Index is now a fairly obvious level of support which held, once again, this morning off an initial fade. 

As I write this, I see we are gaining steam to the upside but having some initial issues at 2140. Crude oil is whipsawing around after inventory, as expected. So, I am looking to see where oil comes out after the dust settles. 

However, the major winner this morning appears to be a corner of the market which has exuded relative strength for a while now--Mid-cap biotechnology issues. 

The AGN for VTAE buyout does not hurt the cause, with VTAE rocketing up 158% off the opening bell. 

With this in mind, I will return to a chart we looked at previously: Minerva Neurosciences. Indeed, there are plenty of viable mid-cap biotechs we are noting for Members. But NERV is a sound chart on a standalone basis, despite being a more speculative issue and fairly thinly-traded. 

However, it serves as a good example of the types of charts we look for in a hot sector, since even if the M&A does not come it can still be deemed an actionable chart. 

On the whole, I want to see if bulls can build on this opening market bounce. If they give up the ghost for an ugly close, then even the sexy mid-cap biotechs become that much riskier to swing long overnight.