DELAFIELD, Wis. (Stockpickr) -- The biotech sector is on fire -- and I mean a five-alarm fire!
Just take a look at the performance of the iShares Nasdaq Biotechnology Index (IBB), which is already up 20% so far in 2014. Over the last year, the IBB has risen an even more impressive 87%. As a trend-following trader, I look for a hot sector first, and then I drill down into that sector to find favorable chart setups. I have been doing this for quite some time with the red-hot biotech sector.
One of my recent biotech stock picks that's exploding higher today is Inovio Pharmaceuticals (INO), which I featured in Feb. 10's "5 Biotech Stocks to Trade in February" at $2.72 share. I mentioned in that piece that traders should keep an eye on shares of INO for a big breakout trade if it could manage to take out some near-term overhead resistance levels at $2.97 to $3 a share with high volume.
Guess what happened? Shares of INO exploded higher last Friday and took out those key overhead resistance levels with monster upside volume. Shares of INO are exploding higher again today, with the stock up 13% at $3.66 as I write. I knew the biotech sector was hot and that INO was the perfect setup, and I don't think this stock is done with its move. Traders should now watch for INO to clear $4 a share with strong volume for potentially more upside.
Despite all the bubble talk, I don't think the biotech sector is anywhere near done going higher. This sector has a lot of favorable headwinds, including faster drug approval legislation, M&A activity and, my favorite, a clear uptrend in place. For those reasons, I want to continue to dig into this sector to find the next explosive movers.
With that in mind, here's a look at five potentially explosive biotech stock plays.