Yesterday was a good day for bulls as the market posted impressive gains across the board. A wave of green performances dominated the market.

See the below Map from Finviz, which displays the S&P 500 categorized by sectors and industries.

Overall, the SPY was up 0.81%, QQQ was up 0.61%, XLF was up 1.12%, XLE was up 1.71%, XLV was up 1.39%, IWM up 0.41%, and leading the way was IBB up 2.14%.

With the overall market trading at all-time highs, many are skeptical and sounding the alarm. During periods like this, I always remind myself of the following:

• As a trader, my job is to react to price action and not predict. 
• Conduct technical analysis to identify trends in the market.
• Let price action and overall trend determine my bias.

Across various sectors, I saw impressive breakouts yesterday—both in industry ETFs and individual names.

So without any further delay, let’s take a closer look at a favorite sector of mine.

iShares Nasdaq Biotechnology Index Fund (IBB)

The IBB closed the day up 2.14% yesterday. Year to date, the ETF is up 11.82% and 22.25% over a year.

Average Volume: 3.29m

ATR: 2.82

Top 5 Holdings: 

AMGN (7.59%), GILD (6.30%), MRNA (5.86%), ILMN (5.03%), REGN (4.12%)

When assessing the potential for continuation in the IBB, I like to look at the IBB’s chart and the charts of the top holdings. I do this to identify bullish setups, the potential for further upside, relative strength, and weakness.

AMGN

The largest weighting in the IBB is AMGN, with a 7.59% weighting. On the daily chart, shares of AMGN continue to base in a range between $240 and $250. For upside momentum, I would want to see shares of AMGN breakout of the pennant and base over $250. After that, $260 resistance would be the next target.

ILMN

ILMN makes up 5.03% of the IBB weighting. ILMN recently broke above $480 resistance and has since spent time consolidating over this crucial area. This is a bullish signal as resistance has now turned into support. As long as the stock continues to base over previous resistance, the bull thesis is still in check, and $520 becomes the next key target.

GILD

With a 6.30% weighting in the IBB, it is vital to take a closer look at the chart of GILD. After reporting earnings, the stock gapped down to support the bullish pennant. Yesterday shares of GILD closed up 2.17% and were near the resistance. This is a super bullish setup, and if the stock can trade over $70, it would be a significant breakout that could provide further upside for the IBB.

REGN

REGN, with a 4.12% holding, has turned previous resistance into support. A break above $595 – $600 could provide momentum higher in the stock and the IBB. Overall, a bullish setup in the stock and a sign of strength and continuation for the overall sector.

MRNA

Shares of MRNA were up 11.51% yesterday. Impressive, to say the least! 

This stock is experiencing incredible momentum. The momentum and breakout yesterday provided further strength in the overall sector. With a 5.86% weighting, it is essential to keep tabs on this stock. Ideally, I would like to see shares hold these elevated prices through a multi-day consolidation or a higher low.

A Closer Look at The IBB

With various bullish setups across individual names in the ETF and the IBB breaking out of a consolidation, it appears the sector’s next target is the all-time high of $174.04. The overall strength in the market and various sectors provides further momentum for this sector as well.

As we advance, I would like to see $168 – $169 act as support. Ideally, I would like to see the stock base over $170. A consolidation over $170 would signal to me that buyers are firmly in control at these prices, and a breakout to new highs is likely. 

As I mentioned above, when I assess the potential for a sector to have momentum, I always conduct technical analysis. This analysis includes looking into the most important companies within that sector. I do this because the charts tell a story—one of further upside or potential downside.