Monday, December 30, 2013

IBB Biotech Weekly Chart Overbot Rising Wedge Negative Divergence Biotech Bubble Price Extended

Fed Chairman Bernanke and future Fed Chair Yellen say there are no asset bubbles in markets. A move in biotech from 58 to 227, 291%, a quadrupling and nearly quintupling, in less than 5 years, is not a bubble. There definition of a bubble and Keystone's are obviously different. The Fed is saying that stocks moving up 60% per year, year after year are fine and dandy, and not in a bubble. They need to pass out what they are drinking to everyone else, or at least loan everyone a pair of those rose-colored glasses.

As price makes new highs, note the decreased oomph in the indicators, negative divergence, that will want to push price lower. The monthly chart is negatively diverged as well but the MACD line is long and strong so that hints a jog move on the monthly basis. Projection is for the biotech bubble to experience the initial pop moving forward for a few weeks, then price will recover on the monthly basis, coming back up again, then should roll over with extended multi-month and yearly weakness going forward.
This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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