The One True Sector Bubble: Profits Here When It Crashes Soon
There has been constant talk about the overall market being in a bubble. Is it a bubble? To some extent yes, however there is one particular sector that is in the stratosphere. The biotechnology sector is the equivalent of the dot.com sector in 1999. To see the type of moves I am talking about, take a quick look at Celgene Corporation (NASDAQ: CELG) and Gilead Sciences, Inc. (NASDAQ: GILD). Both stocks are up more than 100% in 2013 with market caps exceeding mega cap stature.
If you believe the market will pull back in 2014, which I believe. The biotech sector could see the biggest fall from these bubble levels. Imagine even a 50% retrace of the 2013 moves. Major profits to be had. If interested, you can short the iShares NASDAQ Biotechnology Index (NASDAQ: IBB) or buy the ProShares UltraShort Nasdaq Biotech ETF (NYSE: BIS). Both give you plenty of exposure to the collapse in the biotech sector.