Friday, March 29, 2024
Hometrading nationA Trump win could also be a win for these volatile stocks

A Trump win could also be a win for these volatile stocks

The usually volatile biotechnology sector is now at its highest level since January, and one strategist thinks a Donald Trump presidential win could send biotech stocks even higher.

Since Democratic candidate Hillary Clinton vowed to control the rise of drug prices in the pharmaceutical space, investors have been expecting the sector to be impacted by the presidential election in November. Trump has also voiced concerns about drug prices. However, Larry McDonald, managing director at ACG Analytics, said Trump could help this group of stocks.

"Biotechs have been hammered over the last year or so, because of some of Hillary Clinton's comments, so a Trump presidency is bullish for the biotechs," McDonald said Wednesday on CNBC's "Trading Nation."

He also sees "a lot going on behind the scenes that's supporting the Trump win."

The biotech group within the is down about 8 percent on the year, but has risen 15 percent in the past month.

Chris Verrone, analyst at Strategas Research Partners, said despite the bounce, he is still reluctant to endorse the biotech sector, because he hasn't seen the uniformity of prior biotech rallies.

"There are still some very important bellwether stocks in the group that have not participated in this," Verrone said on Trading Nation.

The XBI, the ETF tracking biotech stocks in the S&P 500, closed at $61.62 on Wednesday. Verrone said there's resistance as the ETF approaches $65.

"I think that marks the upper end of the range. I'd be more inclined to take risk off as we approach those levels," he said.

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