Roadblock Weakening?
Biotech has been a tough place to be since the 2021 top. The MONTHLY chart below shows the visual pain investors have had to endure following the bearish shooting star candle in February of that year. The ETF declined 13 of the next 17 months hitting a peak near 175 to a low of 62. From there the fund vacillated roughly between the round 70-90 numbers before breaking above 90 this February and that stubborn line of resistance now looks like support as it was firmly retested and held in May and July. We know that the vast majority of instruments that trade through 90 will reach par and beyond and that is where the ETF has been stuck. Notice the 50 MONTH SMA resides there and the XBI was above that line intramonth in February, March, and July this year but all three were unable to CLOSE above it. It has now formed a bull flag and it will be interesting to see where this finishes August on Friday. The daily chart this time around, for the time being, has held up better than the early and late July examples. That’s a good start. Let’s see where we finish to end the week and August.