The biotechnology sector is getting back on track, and the group is on the offensive once again.

For portfolio managers, the sector makes a lot of sense. They want to buy growth, but they're afraid of a recession. The recent market turmoil has made traders defensive and looking toward the health care area as a safe haven.

Under these circumstances, biotech looks very attractive. Stocks in this sector are growth stocks, but the group also falls within the defensive health care sector. This allows fund managers to buy growth and not worry about demand dropping off due to a recession. Consumers get sick and need drugs no matter the economic backdrop.

The weekly chart of the biotechnology index has rallied along with the market off of the 2003 lows and has shown strong comparative relative strength vs. the

S&P 500

and the broader health care sector.

The group broke out over long-term resistance and over the past few months pulled back for a retest of this support line. The support held and the index is now turning higher. All of this action is bullish and suggests that the primary uptrend in the group is solid and intact. This backdrop tells us that we can go ahead and find some strong names in the sector to buy.

One of the strongest names in the biotech sector since the turn in 2003 has been

TST Recommends

Celgene

(CELG) - Get Report

. Celgene manufactures drugs for cancer treatment and has success with two of them, Revlimid and Thalomid. Last quarter, the company reported sales of $347 million, which represents a 76% increase over the same quarter last year.

Relative Strength: Celgene vs. Biotech Index

Click here for larger image.

On a comparative relative strength basis, the stock has outperformed the biotech sector, making it one of the stronger names in an already strong group. Investors should focus on stocks that are outperforming both their peer group and the market.

Currently the stock is holding a solid long-term uptrend line that has been in place since 2005. It is now challenging overhead resistance at $66 and looks ready to break out to the upside.

Investors can buy the stock at this level, but any pullback above $60 would be optimal for an entry. Use the primary uptrend line at $58 as a stop-loss; a break of this trendline would suggest the bulls have lost control of the stock.

Celgene is a strong stock with a solid uptrend in a group that is gaining strength. We would look for the trend to continue.

At the time of publication, John Hughes and Scott Maragioglio had no positions in the stocks mentioned. Hughes and Maragioglio co-founded Epiphany Equity Research, which has developed and utilizes proprietary tools to identify and track liquidity changes in the market indices and sectors. Hughes advises numerous asset managers, hedge funds and institutions managing in excess of $30 billion. Maragioglio is a member of the market technicians association (MTA) as well as The American Association of Professional Technical Analysts (AAPTA) and holds a Chartered Market Technician (CMT) designation. Maragioglio has also served on the board of directors of the AAPTA.