There is one very important investment concept that every successful investor fully understands and respects: Sector Rotation. It is a common theme by portfolio managers. InvestingHaven’s research is a huge fan of stock rotation within a sub-sector where the leaders will either top up for potential reversal giving ways for the bottoming stocks a chance to become bullish. Approximately one month ago, we wrote about 4 potentially bullish biotech stocks, followed by another article on a potential breakout of the biotech sector.

The following four leading biotech stocks have shown signs of fatigue and look set for mid-term bearish outlook unless a very strong buy signal would emerge in the very short term.

Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN) is a biotechnology company headquartered in Tarrytown, New York. The company was founded in 1988. It operates as a biopharmaceutical company discovering, inventing, developing, manufacturing, and commercializing medicines for the treatment of serious medical conditions. The company involves in marketing medicines for eye diseases, colorectal cancer and a rare inflammatory condition and has product candidates in development in other areas of high unmet medical need, including hypercholesterolemia, oncology, rheumatoid arthritis, asthma and atopic dermatitis.

Monthly chart of REGN

For almost 19 years, the price of REGN was consolidating in a big range of 6 – 24, and in there it set an extreme low of 3 and an extreme high of 57. After going through 3 highly volatile quarters with whipsawing around 57 in 2012, price finally broke above and went skyrocketing with a 870% gain reaching the top of 530. It took REGN roughly 3.5 years to form a double top and price breached the neckline of the double top at ~335.

Going forward, the next thin support sits around 275 and if this fails to hold then ~180 will be the next retracement target. It will not be very likely that ~180 would give away but if does then prices would fall all the way to 60.