(Note: The author of this fundamental analysis is a financial writer and portfolio manager. He and his clients own shares of CELG.)

The biotechnology sector has stalled recently after rising by 5.5 percent in August. So far in September, the sector has fallen by nearly 50 basis points, as measured by the iShares Nasdaq Biotechnology ETF (IBB), while the broader S&P 500 has rallied by nearly 1 percent. But the internals of the group suggest the sector could be set to surge again, lead by biotech heavyweights Celgene Corp. (CELG), Biogen Inc. (BIIB), and Gilead Science Inc. (GILD).

Bullish Setup

The Nasdaq Biotechnology ETF is up nicely since bottoming around the middle of August, rallying by nearly 10 percent back to $332. The formation in the chart suggests the ETF could be set to rise by another $10 toward resistance at $343.

Shares of the ETF have consolidated over the past couple of weeks around the $330 level and have formed a technical formation called a pennant or flag. The setup is bullish and suggests that after the consolidation period is over, the ETF is likely to rise to resistance, as we previously noted.

Celgene Primed For All-Time Highs

Celgene shares have also been consolidating around the $140 level after breaking out in mid-August. Shares of the company are already trading near all-time highs, and the stock looks primed to push toward the $150 level. The technical chart is exhibiting a similar pattern to that of the Nasdaq Biotech ETF, with a pennant formation being created from the recent consolidation.

Biogen Looks Strong

Biogen shares have recently broken a key resistance level right around $300 and have surged to $329 since breaking out in mid-August. The stock is likely heading toward the top of the gap at $355, which was created in July 2015. That is the next level for the stock to test. It likely will meet a good deal of resistance at that level and would take a period of consolidation and base building before it pushes through.

Gilead's Big Breakout

Gilead shares have risen by nearly 30 percent since bottoming in the middle of June, and they look primed to get back to the mid-$90 range. First, Gilead is likely to head toward the gap created in April 2016. Second, the stock has broken out of a long-term descending wedge, which would be seen as a reversal pattern that also signals that sentiment around the stock has apparently changed.

The group appears to be gearing up to move higher from a brief pause after a hot month in August. The Nasdaq Biotech ETF is giving a bullish reading, while biotech heavyweights look like they are ready to do the heavy lifting to get the whole sector moving up again. (See also: Why The Biotech Rally Has More Room To Run.)

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.

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