Mega Cap Withdrawal?
In biotech, we discussed in our WEEK AHEAD Note last weekend that there was some bifurcation between the IBB and the XBI. The more “equal weighted” XBI broke above a symmetrical triangle on 1/12 rising more than 4% but has been having difficulty following through to the upside until Friday went back on track. The ETF rose almost 6% last week and this past week fell less than 1%, a good start. A bearish recent habit may be in the window now as the weeks ending 10/28 rose 6.2% and the next week declined by 4.5%, and again the week ending 11/11 rose 6% and the very next week lost 4.4%. And lastly, it jumped 5.7% the week ending 12/2 only to give back all of that and more the following week off more than 7%. I guess the silver lining was there was no follow-through to the downside. On the other hand, the top holdings in the IBB like AMGN is sporting a bearish head and shoulders pattern, and the chart below of GILD has a rounded top. The tug-of war-between bulls and bears in the arena continues.