A Trump win could also be a win for these volatile stocks

The usually volatile biotechnology sector is now at its highest level since January, and one strategist thinks a Donald Trump presidential win could send biotech stocks even higher.

Since Democratic candidate Hillary Clinton vowed to control the rise of drug prices in the pharmaceutical space, investors have been expecting the sector to be impacted by the presidential election in November. Trump has also voiced concerns about drug prices. However, Larry McDonald, managing director at ACG Analytics, said Trump could help this group of stocks.

"Biotechs have been hammered over the last year or so, because of some of Hillary Clinton's comments, so a Trump presidency is bullish for the biotechs," McDonald said Wednesday on CNBC's "Trading Nation."

He also sees "a lot going on behind the scenes that's supporting the Trump win."

The biotech group within the S&P 500 is down about 8 percent on the year, but has risen 15 percent in the past month.

Chris Verrone, analyst at Strategas Research Partners, said despite the bounce, he is still reluctant to endorse the biotech sector, because he hasn't seen the uniformity of prior biotech rallies.

"There are still some very important bellwether stocks in the group that have not participated in this," Verrone said on Trading Nation.

The XBI, the ETF tracking biotech stocks in the S&P 500, closed at $61.62 on Wednesday. Verrone said there's resistance as the ETF approaches $65.

"I think that marks the upper end of the range. I'd be more inclined to take risk off as we approach those levels," he said.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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