Halozyme Therapeutics' Relative Strength Improvement and Its Implications for Biotech Investors

The biotech sector has entered a period of renewed vigor in 2025, driven by favorable regulatory dynamics, reduced pricing uncertainty, and a surge in mergers and acquisitions. Against this backdrop, Halozyme Therapeutics (HALO) has emerged as a standout performer, with its stock price surging 53.2% year-to-date and a 22.25% gain over the past four weeks. This momentum, coupled with improving technical indicators, raises critical questions for investors: Is HALO a momentum-driven play in a sector on the rise, or is it a cautionary tale of overvaluation amid mixed analyst sentiment?

Technical Momentum and RSI Dynamics

Halozyme's Relative Strength Index (RSI) has oscillated between bullish and overbought territory in recent weeks. As of November 2025, the RSI stood at 56.697, signaling a "Buy" signal, while a more recent reading of 68.41 suggests the stock is nearing overbought conditions. This divergence reflects the stock's volatility: HALO closed at $68.36 on November 26, up 0.29% for the day, but had previously dipped to $62.95 on December 4-a 2.64% decline from its prior close. Such fluctuations highlight the stock's sensitivity to both sector-wide optimism and company-specific catalysts, such as its recent acquisition of Elektrofi, which Goldman Sachs cited in a downgrade to "Sell" due to valuation concerns.

Despite the mixed signals, HALO's price action aligns with broader biotech sector strength. The SPDR S&P Biotech ETF (XBI) has gained 34% over six months, while the ARK Genomic Revolution ETF (ARKG) surged 42% during the same period. These gains reflect investor enthusiasm for late-stage clinical trials, regulatory clarity, and strategic M&A activity. For HALO, the key question is whether its technical momentum can sustain itself amid a sector-wide rally-or if it's a temporary spike in a crowded market.

Financials and Sector Leadership

Halozyme's financial performance provides a compelling case for its inclusion in momentum-driven strategies. Royalty revenue rose 52% year-over-year to $236 million in the most recent quarter, contributing to total revenue growth of 35% to $265 million. The company also raised its 2025 financial guidance, signaling confidence in its pipeline and partnerships. These results have propelled HALO to the top of the Medical-Biomedical/Biotech group, ranking No. 1 out of 667 stocks.

However, HALO's absence from major biotech ETFs like XBI, ARKG, and the Direxion Daily Biotech Top 5 Bull 2X ETF (TBXU) remains notable. While these funds focus on companies with "innovative technologies or strong growth potential," HALO's exclusion suggests it may not yet be a core holding for passive investors. This creates an opportunity for active investors to capitalize on its momentum before broader institutional adoption.

Strategic Implications for Investors

The biotech sector's resurgence is underpinned by structural tailwinds. For HALO, the acquisition of Elektrofi-a developer of subcutaneous delivery systems- positions the company to expand its Enhanze® drug delivery platform, a critical differentiator in an industry where therapeutic efficacy and patient compliance are paramount.

Yet, investors must balance optimism with caution. Goldman Sachs' downgrade underscores concerns about HALO's valuation, particularly in a sector where clinical trial outcomes and regulatory approvals can swiftly shift sentiment. The stock's recent pullback to $62.95-a 22% retracement from its 52-week high of $79.50-also highlights the risks of overbought conditions.

Conclusion: A Momentum Play with Caveats

Halozyme Therapeutics' relative strength improvement reflects its alignment with the biotech sector's broader momentum. Its strong financials, strategic acquisitions, and technical indicators position it as a compelling candidate for investors seeking exposure to innovation-driven growth. However, the stock's volatility and Goldman Sachs' bearish stance necessitate a disciplined approach. For those willing to navigate the risks, HALO represents a high-conviction opportunity in a sector poised for continued outperformance in 2026.