Thursday, December 22, 2016

IBB Biotech ETF Daily Chart; Death Cross

The biotech stocks began the year tumbling lower and remain soggy ever since. IBB was washed out and recovered during the year and the joyous golden cross occurs in September with the 50-day MA piercing up through the 200-day MA. This move forecasts higher prices ahead, however, as Keystone always mentions, when a golden cross occurs, typically that is when price retreats since it already took weeks and months of energy to create the positive golden cross. That happens. IBB peaks in September and drops.

After a golden cross, the retreat is expected, as occurs, and if the golden cross remains, price will rally again and pursue the higher highs in the weeks and months ahead to honor the golden cross. But this did not occur. The price action weakened to the extent that a death cross is now generated a few days ago forecasting trouble ahead for biotech stocks.

Since the death cross just occurred, the expectation would be for prices to actually pop with a relief rally. At that point, if the death cross remains, prices will be lower for the weeks and months ahead. If instead the golden cross reappears, then biotech stocks will be a great investment going forward. For now, the biotech bears rule the intermediate term ahead although some buoyancy would be expected over the next week or two. IBB price will stagger sideways playing off the blue channel lines. 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.

Note Added Saturday, 12/24/16, Christmas Eve: IBB ends the week at 272.32. Price and its moving averages on the daily and weekly charts all converge in the 270-279 range. Price is compressing sideways and will likely perform a radical price move in the near future from this range. Biotech bulls win huge if IBB moves above 280. Biotech bears win huge if IBB falls below 270.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.