Eoin Treacy's view While the S&P500 has hit new all-time highs and the Autonomy focused Dow Jones Industrials remain in form, the Nasdaq's recent performance has gone relatively unremarked. Until recently, Apple's performance has acted as a headwind for the Index. However, the fact remains that the Nasdaq plays host to a wide array of companies representing the cutting edge of technological innovation.

This table of the Nasdaq-100's best performers this year is heavily weighted by Biotechnology companies. Biotech was among the sectors that crashed hardest in 2000 as investors refocused on the lead times for the commercialisation of therapies. An aggressive process of rationalisation ensued and those that survived spent much of the next decade in lengthy base formations. A significant number of biotechnology companies broke out of their bases in late 2011 and the larger companies have since extended those advances. (Also see Comment of the Day on October 28th 2011) Having reviewed the sector on a number of occasions over the last few years, I thought it might be timely to revisit it now given its recent outperformance.

Amgen, Biogen, Celgene, Gilead Sciences and Seattle Genetics have accelerated higher over the last three months. They have almost all doubled since their initial breakouts in 2011 and hit at least short-term peaks last week. Potential for some additional consolidation of recent powerful gains has increased, but sustained moves below their respective 200-day MAs would be required to question medium-term potential for further upside.

Regeneron Pharmaceuticals continues to accelerate higher and a clear downward dynamic will be required to check momentum beyond a brief pause.

Alexion Pharmaceuticals pulled back sharply in October and has been ranging in the region of the 200-day MA, mostly below $100, since. A sustained move above $100 would help bolster the medium-term bullish outlook.

Following an initial surge in early 2012, Illumina ranged mostly below $55 until early April when it reasserted medium-term demand dominance. A clear downward dynamic would be required to question potential for additional upside.

Following a steep decline in 2012, Staar Surgical had been ranging mostly above $5. It broke emphatically back above the 200-day MA this week.

ResMed, Cubist Pharmaceuticals, The Medicines and Immunogen have all been ranging with an upward bias since late last year and sustained moves below their respective 200-day MAs would be required to question medium-term potential for further higher to lateral ranging.

M&A activity in the biotech sector remains brisk with Thermo Fisher Scientific acquiring Life Technologies last month. (Also see Comment of the Day on July 10 th 2012). Thermo Fisher Scientific broke successfully above its 2008 and 2011 peaks in January and is becoming increasingly overextended relative to the 200-day MA.

In conclusion while Biotech represents a growth sector, a number of the larger companies have performed extraordinarily well and are becoming increasingly susceptible to mean reversion. As commercialisation becomes an increasingly more viable prospect, the potential for additional M&A activity remains undiminished.