Looking back at the long-term charts, biotech stocks have had a strong multiyear run. That run came to a sudden halt last summer, and since then the biotechs have been in free fall. This begged the question to Jim Cramer: have these stocks finally been punished enough?
To gain clarity on the future of biotech, Cramer spoke with Carolyn Boroden, a technician and colleague of Cramer's at RealMoney.com. She saw major signs that the vicious correction for biotech has finally come to an end.
She started by looking at the weekly chart of the iShares Nasdaq biotechnology ETF, IBB. Boroden found that the downside pattern appears to have terminated, with IBB trading sideways since early February.
Boroden found two major patterns in play. The first was a double-bottom formation that was triggered when IBB broke out above the middle-high in the pattern on Monday.
"The double bottom suggests that the pain is over, and there might be some gains waiting in the wings," the "Mad Money" host said.