Biotech is back and a constructive place to put money to work, says Piper Sandler's Craig Johnson

Market Overview - The market is currently retesting important support levels, particularly the 50-day moving average, which has shown signs of intraday rallies following recent probing [2][5] - There is a notable weakness in market breadth, with a decline in the number of new highs and stocks above their 40-week or 200-day moving averages [2][5] Sector Rotation - A rotation is occurring in the market, moving away from larger tech stocks towards more traditional sectors like consumer goods, as evidenced by the performance of companies like Nike and McDonald's [3][5] - The AI trade, which has been a significant driver of market performance, is seeing some profit-taking, leading to a potential shift towards sectors that have been out of favor [4][5] Healthcare Sector - The healthcare sector is showing signs of recovery, with several companies like Exact Sciences, Eli Lilly, and Merck experiencing downtrend reversals [7][10] - Biotech stocks are also performing well, with the IBB index reaching record highs and companies like Amgen and Gilead showing significant improvements [9][10][11] Investment Opportunities - There is a constructive outlook for biotech and healthcare, suggesting that these sectors may be good places to allocate capital as they show signs of improvement and less risk compared to tech stocks [10][11]