You Might Want to Start Believing in Fate

Fate Therapeutics Inc., a La Jolla-based cancer and immunotherapy small cap biotechnology stock, is a pretty textbook example of a "good house in a bad neighborhood" setup in the market. Specifically, biotechs as a group have been floundering, with the XBI (ETF for small cap bios) weakening further this morning below its 200-day moving average. 

But you would never know that when looking at the daily chart for FATE, below. FATE is flagging tightly just above its recent base, operating above rising and properly-aligned moving averages (20-day up through the 200-day).

Now, the hard part is gauging whether the biotech weakness will eventually bring down even the likes of FATE or continue to keep a lid on it, or instead if FATE is ripe to explode higher once bios start to get with the program. Naturally, bulls and bears alike will pick their bias. 

If we are trying to stay objective, though, we simply must come to terms with the fact that the next market move will likely portend whether FATE can keep dazzling to the upside. Of course, there is always the possibility of a buyout by a larger firm, or positive data specifically to FATE and its pipeline. 

However, what we know for sure is that FATE has been as strong as any biotech chart of late and commands our attention, especially with the broad market trying to bounce off fresh trade war/Fed concerns this morning which sent us down off the opening bell.