Biotech Holding On:  

I have stated a couple of times that bearish candlesticks in bull markets are less effective than bullish ones calling potential bottoms and that is just what the XBI is doing here. Shrugging off two negative ones here is a good start, but I still prefer to wait for PRICE confirmation with a break above the bull flag pivot. For those that did not read the WEEK AHEAD Note the very round par number where it is swimming at the moment is important on the MONTHLY chart here, which would be a hold above the 50 MONTH SMA. Notice on the ratio chart it is starting to break ABOVE a bear flag against the IBB and we know from FALSE moves come fast ones in the opposite direction. The IBB is just above a double bottom pivot of 137.64 taken out on 2/23, and notice it has moved higher following the Bollinger Bands tightening in late January and early February. Round number theory came into play for the top holding in REGN at the very round 1000 number with rejection there on 2/28, and it did not follow through lower after the consecutive bearish engulfing candles on 1/31 and 2/2 was a good sign. Another boost may be given if the fourth largest component in GILD can break ABOVE a bear flag formation.

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