Adding Flavor to a Salty Market

Despite glaring underperformance by the small caps in the IWM ETF early on, quite a few tech stocks are bouncing back nicely from some really drubbings yesterday. PLAN, for example, a late-2018 IPO in the hot software space, sold off harshly into the bell on Monday but is managing a more-than-respectable 6% bounce-back as I write this. 

Still, if IWM sinks deep into the red today it is hard to imagine bulls having the firepower in the broad market to take all of the senior indices (Dow, S&P, Nasdaq) back over their respective 50-day simple moving averages.

While the small cap key is a viable one I am watching, it is also worth noting that there is nothing quite like the big deals we have seen of late in the biotechnology space to add some flavor to a salty market, with LOXO getting bought at a hefty premium and the CELG deal nothing to sneeze at, either.

Indeed, both the IBB and XBI ETFs have responded in kind after acting particularly demoralized in December. Naturally, we can try to bottom-fish the likes of CLVS BLUE BPMC PBYI, all of which could be next in line to get bought out at a fat premium, too.

But what if no buyout comes? 

All you would be left holding, then, would be a chart operating below a declining 200-day moving average with plenty more technical work to do.

Thus, charts like EXEL and VNDA, respectively below on their daily timeframes, are further along in the improvement space in biotech than the other names listed above. VNDA has been overlooked for a while now, but the chart is telling a bullish story and has been for quite some time.