The buyout bid for Genentech Inc (DNA) has the stock up 13%. This is pushing the Amex Biotech Index (BTK) to its highest point of this year and allowing the Biotech HOLDRS (BBH) to hit a new annual high. The enthusiasm seems to be carrying over to other stocks in the sector. A look to the component stocks for the Amex Biotech Index (BTK) shows that Biogen Idec Inc (BIIB), Human Genome Sciences (HGSI), and ImClone Systems Incorporated (IMCL) all showed strength this morning. Digging into these 3 stocks shows some interesting attributes.

The most encouraging aspect of Biogen Idec is that that most analysts are on the sidelines. According to Zacks, only 4 of 17 analysts (24 percent) rank BIIB with a "buy" rating. Today's pop puts the stock above its recent highs near 66 and above its peak front-month call open interest strike. The stock is showing signs of life so I would keep an eye out for possible upgrades.

Human Genome Sciences and ImClone Systems are more favored by analysts with the percent as buys coming in at 54 percent and 70 percent, respectively. However, both stocks do have the potential to see some short covering. According to data collected by our Quantified Analysis group, 19% of the HGSI's float is sold short while 9% of the IMCL's float is sold short. It should be noted though that both of these stocks still have near-term resistance to contend with.

Chart Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial