IBB Biotech ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Pharma Stocks Are Bloated Despite Obesity Treatments

The IBB ETF is a moon shot over the last year mainly due to the fat shots and now fat pills for treating overweight and obese Americans, and there are a lot of them. 80% of Americans are overweight according to the BMI that all these same people will say is an unrealistic indicator. Of course they say that because they are fat. In modern day society, you can stuff your pie hole full of, well, pie, cake, cookies, hotdogs, white bread, potato chips, corn chips, chocolate, doughnuts, candy, and wash it all down with soda pop, and then pop a fat pill and you're good to go.

Keystone worked with a guy many years ago that was overweight with a heart condition but everyday would eat a big greasy McDonalds or Wendy's hamburger, with fries so tasty the grease would stick to your face for a few hours, and a large soda. One day another guy in the office, genuinely concerned about the other man's health, asked him, "Dave, should you be eating that food with your health?" Dave laughed and said no problem because he just popped a Lipitor (statin drug). This is what we have become.

For the fat shots and fat pills, a lot of the folks that wanted them, and could afford them, probably have already done so. That may be the reason the chart is topped-out on the weekly basis. Hopefully, people find success with the treatments and lose weight but it would be healthier to simply eat less and exercise more. People are too impatient nowadays and do not want to do the long work and daily maintenance to remain healthy. A shot or pill is easier between bites of Oreo cookies. You're So Impatient.

Keystone knows two people that were on the fat shots for a couple months or so and stopped. The lady said the treatment made her nauseous and she had the sh*ts. The guy said the shots upset his stomach, same type of thing, some diarrhea, and after he stopped he gained back what little weight he lost and he added another five pounds on top of that. Maybe other folks are having better success. The pharma companies that make the obesity treatments should buy adult diaper companies. They seem to go hand and hand.

Anyhoo, the chart is topping out with a rising wedge pattern, overbot conditions and negative divergence as shown by the red lines (price continues higher but ALL the chart indicators are sloping lower, negatively diverging from price, broadcasting loud and clear that they are out of gas and cannot take that fat bloated price any higher). The expectation is for a multi-week drawdown to begin for IBB.

If you put 10K in IBB a year ago, you have 17K now. Take the money and run. The daily chart is chopping along for three months at 167.5-177.5. That 167.5 support is important; take heed if that fails. The daily chart hints at more sideways slop. Ditto the 2-hour chart.

Price may churn on the weekly chart above moving sideways with a downward bias but not making strong headway lower for a week or two more. Investors and traders are bulled-up about fat shots and fat pills probably because they are overweight and/or obese, so they will be anxious dip-buyers. Keystone is not long or short IBB but will watch it and see if a nice place to enter short develops over the coming days. 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.