Take Your Biotech Marching Orders from This Stock

Barring some stock-specific news anytime soon, I suspect the issue of whether the biotechnology sector rally not only continues to hold but also broadens out can be seen in the likes of Amgen and a few other IBB plays. 

Specifically, the AMGN monthly chart, below, indicates the stock has essentially been sideways for roughly two and a half years now. Just as the new highs were blunted by sellers, the attempted breakdowns along the way were supported by buyers. And hence the range. 

Given how pronounced this sideways range is, AMGN may serve as a "tell" of the IBB going forward insofar as we want to gauge whether this biotech rally can broaden out this summer. If the AMGN range breaks higher, it is hard not to see how IBB does to thrive, too, and vice versa (again, barring stock-specific major news such as from the FDA). Also note AMGN is a good candidate because it is not the main relative strength play that REGN has been, nor the dud like GILD.

Instead, Amgen has been somewhere in the middle. 

Looking down the line at smaller bios, the likes of CORT and JUNO are also worth gauging to see if they come alive this summer or, instead, if this rotation is a head-fake the likes of which energy bulls know all too well.