September was an ugly month for health-care stocks and the biotech industry in particular. Health-care stocks were down 5%, and biotech stocks were down 13%, the worst-performing sector and industry overall. Both areas were previous leaders over the past few years, but recently, investor appetite for health-care stocks has been scarce. So far, the month of October does not look very favorable for the sector either, which has underperformed the broader market by roughly 2% up to this point. Despite this depressed sentiment, investors should be viewing this correction as an opportunity to buy health-care and biotech stocks, which should resume their leadership again next year. In July, I warned about the impending top in biotech stocks, four days before the iShares Nasdaq Biotechnology ETF IBB, +0.94% struck a top at 400.79. I published this column when price was approaching my minimum target of 400stated two months prior. In the July column, I proposed a correction for IBB that would take price back to 275-205, the upper end of which was almost reached in August before a bounce. Despite more or less satisfying the minimum target for the correction, I still believe that IBB has more downside left before putting in a bottom and beginning the next rally phase. While the lower end of the target region at 205 remains valid for a worst-case scenario, I am currently more optimistic and am looking at roughly 260 to complete the correction. From a fundamental perspective, aside from comments by Hillary Clinton which are ultimately inconsequential, not much has changed over the past few months for the industry. Some companies have recently announced downward earnings revisions whereas others have seen substantial upward revisions. Overall, valuation metrics as a whole remain reasonable, and forward P/E continues to be favorable. In other words, the current correction appears to be sentiment driven rather than based on some major fundamental shift. Once biotech stocks do find a bottom, I expect the strong upward trend to continue, taking IBB to new all-time highs again. My current targets above for the next rally phase range from 472-647, which represents a 50%-110% increase from the current price and 80%-145% from my projected bottom at 260. Based on this analysis, I believe that investors should be viewing this correction as an opportunity to buy, looking past the current depressed sentiment. More from MarketWatch