Wall Street handed out some real good news yesterday, and it made me stop and think. The AI infrastructure names keep getting hit with selling pressure while, supposedly, we’re sitting on the greatest technology humanity has ever built…
So why aren’t we seeing it show up in ways that actually change lives?
Then Moderna answers that question for me. I think this changes how I look at the whole AI trade going forward.
Cancer runs in my family, on my grandmother’s side. Knowing that sits with you differently. I remember talking to my cousin in Puerto Rico about it once. He just shrugged and said:
“The ride has to end at some point, that’s how it is.”
He was completely at peace with his own mortality. That stuck with me. I’ve spent a long time just accepting that the disease is out there and the odds catch up to somebody eventually. Yesterday’s news says that might not have to be the case. And we may owe part of that to AI.
A Breakthrough:
Moderna and Merck reported a successful Phase 3 trial yesterday for a personalized mRNA cancer vaccine, given alongside Keytruda to high-risk melanoma patients after surgery. It’s the first Phase 3 win ever for a vaccine built to a patient’s own tumor, and the first for an mRNA cancer therapy period. That’s a real step toward a cure, not a hope headline. And even with the AI infrastructure trade stuck in the mud, biotech might end up being one of the best use cases for AI there is.
So today I’m walking through charts on eight biotech leaders that could take the baton and lead this market forward. We need leadership from somewhere, biotech or software, because the AI trade is taking the summer off.
Quick disclosure before we get into this. Nothing below is a recommendation or financial advice. This is what I’m seeing on the charts and what I’m doing with my own money. Do your own research.
$MRNA | Moderna
Let’s start with the big dog.
Moderna builds mRNA-based medicines, the same platform behind its Covid vaccine, now being pushed hard into cancer treatment and other diseases. What led into this move was a lot of base building. Consolidation going back to March, mostly sideways, picking up steam in June, then tightening into a big cup through July. So it was sitting in a base, and when a stock gaps out of a base like that, we call it a breakaway gap.
Traders like Kristjan Kullamägi call these “EP”s when they hit a certain threshold: a neglected, long base plus a catalyst the market didn’t see coming. A step toward curing cancer fits that bill.
If you traded the five minute highs instead, another Kullamägi concept, you would have crushed it. The five minute high was 122. Buy that pivot, ride it to the close at 174.93. If you did that, congratulations. I didn’t, and I’ll admit that.
Right now I’m hoping for sideways action, maybe a week or two of flat base building, before I look at this again. Some of these names won’t give you that chance, they just keep running. No guarantees either way, but this one’s on my watchlist because of what the news means.
$MRK | Merck
Next is Merck, Moderna’s partner on this drug. Merck is one of the largest pharmaceutical companies in the world, with Keytruda, its blockbuster cancer immunotherapy, at the center of its oncology business alongside a large vaccine and animal health portfolio.
Merck also gapped up on the news, and this one might actually be more playable. What it’s missing versus a textbook EP or breakaway gap is the base. It did build a long base from February through about July, but it’s been uptrending since then, and I like these setups better when a stock is going sideways, sitting close to and right off its 200 day moving average. This one’s already trending up. It could still work.
Here’s what I’m watching. I’ve got an alert set for the gap up day high, 153.50. If it consolidates for a day, two, or three, and then breaks through that level, taking out the gap day high, it could be worth a position, sized smaller than usual. My stop would sit at the low of the gap day, 144.90. Close below that and I’m out.
Size the position around that stop. Do the math on what a move down to 144.90 costs you as a percentage of total equity, ideally not more than 1%. That’s a bigger conversation for another post. Those are the technical levels I’m watching on this one.
$GH | Guardant Health
Next is Guardant Health, a precision oncology company. They run liquid biopsy tests, blood draws that screen for cancer, monitor for recurrence after treatment, and help doctors pick the right targeted therapy, all without a tissue biopsy. Sales growth is good here. Return on equity isn’t, on the fundamentals side, but let’s get into the chart.
It’s base building, and I think this one is setting up an actionable area. Checking the weekly, the base looks fine. It’s a little unusual, there’s a big weekly bar in the middle that pokes outside the high and low of the range more than you’d typically see. But it’s tightening up on the right side of the base now.
The classic pivot is a cross above 176.58, ideally on an expansion of average true range or a heavy volume day. Worth watching for that.
Zooming out, the stock built a huge consolidation from November 2025 through May 2026, then took off, moving from about 98 to 174, and it’s digested those gains well, respecting its moving averages the whole way.
The thing about Guardant is the sales growth is real but the EPS isn’t positive yet. If you’re a stickler for EPS, fair enough, I understand that stance. For me, sales growth is always going to drive the fundamental side of my decision.
$LLY | Eli Lilly
Next is Lilly.
Full disclosure: I own a position here, started yesterday, through the 2x ETF that tracks it, LLYX. Wanted to be upfront about that.
Lilly makes GLP-1 drugs that treat obesity and diabetes, the same drug class behind Zepbound and Mounjaro, alongside a growing oncology and immunology pipeline. Obesity is a serious disease in this country. A lot of people lose their lives to the heart problems and cholesterol issues that come with it. People tend to think of this category as vanity medicine, but it’s a health issue at its core. A drug that treats it is a good thing.
It’s been a tougher stock for me personally. I’ve owned it a few times before. I owned it back in June, it moved up but never got real traction. It built a flat base from June through yesterday and broke out of it in August, clearing the pivot around 1250. I think it’s extended from here.
Lilly does give you opportunities though. The way it’s been trading, you can buy a pullback to a key moving average, which is exactly what I’d be looking for if I didn’t already own it, an upside reversal type of setup. My stop is always the low of the breakout day. Close below that, I’m out. If I didn’t own it already, I’d be watching for a pullback to a key moving average as it continues to trend higher.
$NTRA | Natera
Full disclosure. I have a position in Natera.
Natera runs genetic and cell-free DNA testing, and the product I care about is Signatera, a blood test built to each patient’s own tumor that detects cancer left in the body after treatment, often catching recurrence earlier than standard scans.
Earnings were really good, sales growth was strong. I bought this one, and it’s been basing out nicely. It built a big sideways cup, every moving average turned up, and then it gapped up on earnings.
I bought that gap up. I got stopped out when it crossed below the gap up day low, and then it reverted on me right after. Made me look foolish, and honestly, I love that.
Those are the trades you have to buy back. It’s okay to get shaken out of a position. It’s not okay to get shaken out and then miss the winner because you were too scared to get back in.
Call it a bull flag with an invisible pole, since there’s no price bar to trace the pole, just the gap itself. Strange way to put it, but on the weekly chart it reads very bull-flag-ish.
If you get a pullback into that flag area, I’d try it, but I’d want to see the stock respect the rising 10 day moving average first, and hold above the low of the flag, 305. Anything below 305 gets me out.
$VRTX | Vertex
Next is Vertex. Vertex built its business on cystic fibrosis drugs, treatments that address the root cause of the disease rather than just the symptoms, and has more recently expanded into gene editing therapy for sickle cell disease and a non-opioid pain drug. This one’s interesting because it’s also been basing since March, similar to Natera. Big cup, gapped up, reversed lower, found support at the 21 day moving average, and has ripped three days straight.
Unlike Natera, this wasn’t a one day move, it’s been climbing fast and aggressively off the 21 day moving average, poking at new highs. I think it’s extended here. I don’t have a position and don’t plan on starting one at this level. But if it keeps trending higher and pulls back to the 21 day moving average, I think it becomes really actionable. One to watch.
$AMGN | Amgen
Next, Amgen, one of the largest biotech companies in the world, with a portfolio that spans oncology, bone health, and inflammatory disease. Same theme as the others: a big base from March through August that it’s now broken out of. It exceeded expectations and has gone straight up since, breaking out at a pivot price of 378.54 and trading right now at 442. Good run.
I think it’s pretty extended from its most recent base, so there’s nothing to do here right now. If it pulls back to a key moving average, you could try it there, but it’s probably smarter to wait and see if it builds its next base first. We’ll see how the group moves from here.
$HALO | Halozyme
Last one is Halo. Halozyme licenses a drug delivery technology called ENHANZE that lets big biologic drugs, which normally need an IV infusion, be injected under the skin instead. They collect royalties from pharma partners who build it into their products. What a move this stock has made. An incredible run out of its base, gapped up strong, then consolidated and digested those gains well. It’s moved higher in a kind of aggressive bull flag, which happens to be my favorite setup.
I missed this one. No position. It’s very extended, but the earnings and sales are super positive, which I love to see. The financials and fundamentals look great, but it’s extended, so that kind of power just puts it on the radar. You don’t have to jump in on a name like this, but you have to watch it, because it’s showing you the signs of a potential next leader.
Where I land on all this
There are a few sectors I won’t trade for moral reasons. Defense names specifically, I stay away from individually. It just doesn’t sit right with me. Can’t fully explain it, it’s just a weird thing for me.
Medicine is different. There’s a real cause behind it. These are trades where you can make money and still sleep fine at night, knowing you’re part of something good.
No guarantees here. Every one of these could break down tomorrow, and I mean that, they could go to zero and I’d have no way of knowing in advance. But right now they look good, and they’re showing real strength. I wanted to lay out what they look like technically and where the actionable levels sit, so if one of these flashes on your screen, you’ll know what you’re looking at.
If you want continuous coverage on leading stocks, what I’m watching, key levels, entries, and stops across a broader list, that’s what the weekly trading plan is for. Feel free to subscribe. Otherwise, be safe out there.
That Moderna news is encouraging. It’ll be interesting to see where this kind of cancer treatment goes from here