Clicky

XBI Biotech Sector Breakdown

XBI (SPDR S&P Biotech ETF) is moving impulsively lower after recently breaking below & backtesting this bearish rising wedge pattern, which was confirmed with negative divergences. Next stop should be the 59.90 area although more downside is likely in the coming weeks & possibly months.

XBI daily Oct 12th

XBI daily Oct 12th

Taking a look at the longer-term time frame on this weekly chart, it appears that so far, the 2016 rally in the biotech sector appears to be nothing more than a typical bear market rally within a large secular bear market that kicked off back in July 2015. Note how this rally recently failed at the 50% Fibonacci retracement level with the PPO now rolling over.

XBI weekly Oct 12th

XBI weekly Oct 12th

0
Oct 12, 2016 2:57pm|Categories: Equity Market Analysis|Tags: |3 Comments

3 Comments

  1. Whatthemark October 12, 2016 3:07 pm at 3:07 pm

    @rsotc
    Any individual names standing out that might outperform?

    0

    • rsotc October 12, 2016 3:09 pm at 3:09 pm

      WTM- I’ll get back to you on that as soon as I’ve had time to review the charts of the individual biotechs & let you know if I see any standout trading opps.

      1+

  2. rsotc October 12, 2016 3:10 pm at 3:10 pm

    The fact that the leading index, the Nasdaq 100, has seen it’s two leading, top-heavy sectors also break down yesterday only helps to validate the breakdown & point to lower prices in the coming weeks/months.

    0

Comments are closed.