Biotech stocks surged on Wednesday, with the popular biotech ETF (IBB) rising almost 5 percent. And according to one technician, there are more gains ahead for the recently beleaguered biotech stocks.
On Wednesday, Rich Ross of Evercore ISI said the biotech ETF could spike almost 19 percent. A previous bounce off the $285 support level indicates the potential for another rally, he said.
"I think this double bottom in here is going to set this stage for a move as high as the 100-day moving average," he said Wednesday on CNBC's "Trading Nation." "It was the break below that 100-day that really set the stock off to the downside."
If IBB reaches the 100-day moving average line at $360, that would be about a 19 percent move from its Wednesday closing price of $303.
Wednesday's bounce follows a steep sell-off for the industry ETF, which has fallen 14 percent in one month. IBB has struggled under a broader stock sell-off, as well as accusations of price gouging in some biotech companies that could lead to greater regulation for the industry.
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"In the recent market decline, no sector has been hit quite as hard as the biotechs," Ross said. "In addition to that broad market weakness, we had a tweet from Hillary Clinton on cracking down on price gouging if she were to be elected president. That's put pressure on the group here."
With its recent losses, the S&P 500 biotech industry has given up prodigious gains from the past year. The group of stocks are now down about 1.5 percent in one year.
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