First off, I believe we are entering a rising interest rate environment, quite possibly in line with the preferred view of inflationary pressures out ahead. In that regard, I want to pop up a graphic for your review that will be included in a regular NFTRH update to follow. As you see, the Biotech sector is not one that traditionally correlates well to a rising interest rate environment. Talk about caveats!
In fact, according to Citi, only Utilities and Consumer items do worse. Of interest is how well the Banks, on which we have been constructive and Semis, on which we have been bullish, tend to do.
We move on with the assumption that only those who have interest in or reason to be bullish on the Biotech sector should consider it. NFTRH+ only cares about technicals, after all.
Since the nominal BTK has been identified as still at a potential buy area in our weekly reports I wanted to update the Bio iShares, IBB. The daily chart continues to look okay as it struggles around the 50 day moving average. Key support, which was penetrated in September and recovered, is very clear.
The weekly chart seems to have all its ducks in a row. It is above visual support, above the EMA 45, and it’s got a MACD and RSI that have each just gone positive. The measured target is 320+ if support holds, but there is an upside gap between 330 and 340, which would probably fill if this trade succeeds and the price moves toward target.
Buy Target: 285 to 290 +/-
Sell Target: 320+
Stop Loss: A loss of noted support and/or the SMA 200 (currently at 277)
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.