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Cramer: Hope for biotech in the blast zone

Looking back at the long-term charts, biotech stocks have had a strong multiyear run. That run came to a sudden halt last summer, and since then the biotechs have been in free fall. This begged the question to Jim Cramer: have these stocks finally been punished enough?

Pharma was in the blast zone on Tuesday, when new tax-inversion rules raised doubts about a deal between Allergan and Pfizer.

To gain clarity on the future of biotech, Cramer spoke with Carolyn Boroden, a technician and colleague of Cramer's at She saw major signs that the vicious correction for biotech has finally come to an end.

She started by looking at the weekly chart of the iShares Nasdaq biotechnology ETF, IBB. Boroden found that the downside pattern appears to have terminated, with IBB trading sideways since early February.

Boroden found two major patterns in play. The first was a double-bottom...