Bear markets are known to have mini-rallies. But what separates the bear market rally from a bull rally is that the former gets cut short by profit taking, making it difficult to sustain any momentum.

But the current two-week equity rally is beginning to show some legs. The BioCentury 100 posted a 5% gain last week - after backing out the blowup of Actelion on Friday (see below) - putting it up 17% in the past two weeks. The group, which lagged the NASDAQ on the way down, now is lagging on the bounce. The Composite added 10% last week, putting it up 26% in the two-week period.

By comparison, the DJIA added 4% last week and is up 8% in the rally; and the S&P 500 is up 10% after a 5% move last week.

Mitch Silber of TF/Carson believes that core biotech investors had money sitting on the sidelines that is now driving the biotech upturn.

The BC100 is still down 25% on the year, after losing a third of its value in the first quarter. But some companies have posted monster gains in the past two weeks: 10 companies above $5 have doubled in price, while 39 have traded up at least 33 percent or more.

Flying lower

The drubbing of Actelion (SWX:ATLN) masked the sector's upswing on the week, as the Swiss company lost CHF302 (58%) to CHF220 on Friday's news that its Phase III RITZ-1 study of Veletri tezosentan endothelin receptor antagonist failed to meet both primary and secondary end points in patients with acute heart failure (see Technology Focus, A5).