Love them or hate them, those dangerous but sexy hand grenades known as biotechnology stocks have clearly outperformed the broad market this year, starting right from the first few weeks in January. Usually, sectors that see accumulation in the beginning of the year tend to see that bullish undertone carry throughout the following quarters.

As we head into Labor Day, the biotechs may very well be set up for yet another leg higher, looking at the tightly-coiled consolidation on the IBB sector ETF chart. I know many of these stocks are very high beta and always carry the risk of a surprise FDA announcement that blows even the most handsome of charts to pieces. However, a bull is a bull and this is certainly some hot action. If anything, adhere to your stop-losses and perhaps use smaller position sizes than usual.

Here are a few hand grenades that look pretty good. Just make sure you pull the pin and throw it towards the enemy instead of holding onto them for too long if the pin pops out.

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