First 5 years were quite disappointing for XBI, as it was locked in a big "penalty box" from the spring of '06 to the spring of 2011... BUT is was slowly building a BIG ascending triangle, fraught with false breakouts (blue arrow), and FINALLY, a break-and-retest of the all time highs (green arrow). From this ATH (upper boundary of the box), to the blow-off top in July 2015, the NET gain was almost 300% over 4 years, on an UNLEVERAGED, DIVERSIFIED ETF!!! How cool would it be if history repeated itself? XBI found itself again inside of a big nasty "penalty box" over the last 5/6 years, BUT it managed to form a BIG ascending triangle, fraught with false breakouts (blue arrows), and FINALLY, a break-and-retest of all time highs (green arrow). Will it quadruple over the next years just like last time? In 2011, rates had been cut aggressively and the world was coming out of a backbreaking recession... Sounds familiar? Just beware of externalities that may rock the boat!! In Agust 2011, the US debt downgrade and the European debt crisis plunged equities into a hole, but for biotech, it was only one last scary shakeout (red arrow) before a historic run!
Full disclosure: I own several biotech stocks totaling over 20% of total assets, and am actively seeking to increase my exposure to this sector. While I don't own XBI, I have reccomended it and similar funds to people unable or unwilling to buy individual stocks. Only buy the amount of stock that you can be sure to hold in the worst market conditions. The bigger the potential upside, the bigger the risk of temporary drawdowns. And they come when you LEAST expect them. Just look at June-August 2011... Buy on pullbacks, NEVER chase prices.
I enjoy your chart and information. I own XBI along with quite few Bio's. Figure, get in where the gett'in is good and the Health sector right now is booming. INO has treated me good along with NVAX. Quite a few little guys have done a pop and run for me. I found XBI about a month ago. Have (4) call options Sept thru Dec. Figuring on one of the bio's in the portfolio will come up with a vaccine. Have a good one and keep up the fine work.
dogchasingcogChasingCars
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@marksmaha, Thank you, wish you tons of gains on all your positions! This analisys tried to take the long view of the sector, the analogy with the past is very interesting, fundamentals have NEVER been better, so one should really try to stick with this theme as long as possible in my opinion.