Healthcare Division:

The biotechs have been having a rough go of it lately, with the XBI now off 12% from most recent 52 week highs. Thursday it fell almost 4%, and it is right on the cusp of breaking below a bearish rounded top pattern pivot of 105. A break below carries a measured move to the very round 90 number. The IHI by comparison is off just 4% from most recent all time highs, and that came in its entirety from todays decline. It is now testing a bull flag breakout pivot of 297, and move to check its validity so soon after the breakout is somewhat of a red flag. The XBI’s weakness is nothing new as the ETF is lower 4 of the last 6 weeks, with five of them CLOSING at or near lows for the WEEKLY range. Heading into an election 2 months away, it would be a bold contrarian play to recommend leaders in the space, but fortune can favor the brave. Demand nothing less than best of breed and make sure you respect your stops if one is wrong, which will be frequently.

This article requires a Chartsmarter membership. Please click here to join.