Biotech Bounce?
This possibility has been discussed ad nauseam and that could be one of the reasons that this time may prevail. No one really left with belief, and this can catch market participants by surprise. Of course, hope is not a strategy, so we need to rely on PRICE and technicals. Below is the daily chart of the XBI and it is putting up a fight, but has done this plenty of times before only to falter. I like the way it is fighting here, but it has to clear the downward-sloping 50-day SMA decisively for me to think this time is for real. On its MONTHLY chart here notice how this has bounced forcefully at the round 70 number as it did in April, and the last 3 times swimming in that area PRICE moved upward to 175, 95, and 103. Could a similar run be in the cards? Top ten holdings in the XBI that could help are GILD which is quickly building the right side of a cup base after filling in a gap from the 2/11 session on 4/25. A bearish evening star was completed on 4/11 and look for the heights to be achieved before Q2 comes to an end. INCY has carved out a bull flag and a break above carries a measured move to 74, but these formations below the 200-day SMA tend to be failure-prone. Perhaps waiting for a CLOSE or two above the secular line makes sense.