For investors looking for momentum, S&P Biotech SPDR (XBI Quick QuoteXBI - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up 97.4% from its 52-week low price of $62.94/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

XBI in Focus

The underlying S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The fund charges 35 basis points in annual fees.

Why the Move?

The pharma and biotech sector was a beneficiary of the likelihood of a divided Congress on Nov 4. “Even though drug pricing and reimbursement reform have seen support from both Democrats and Republicans, we expect the Senate’s filibuster-proof, 60-vote supermajority requirement to pass major legislation will shield the biopharma industry from the most controversial reforms,” SVB Leerink Geoffrey Porges told clients in a research note, reports Bloomberg, as quoted on Aljazeera.com.

An analyst with Jefferies sees continued deal activity in the space. This explains the rally in XBI.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 48.80, which gives cues of further rally.

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