NFTRH+; A Look at Biotech

Sending to the entire subscriber base since this works as a macro-related update as well.

First, a long-term chart we have reviewed on occasion showing leadership lost by big Bio vs. big Tech.  A long-term series of higher highs and higher lows is intact, but the relative bull market has been under much pressure since 2015, when it dropped below the long-term supportive moving average.  We should temper relative bullishness (to NDX) until/unless that moving average is exceeded.


Now let’s look at the Biotech ETF from daily, weekly and monthly time frames.  We noted in NFTRH 444… “As for Biotech, its little bearish pattern looks less bearish and more like a consolidation
the longer it meanders sideways. Personally, I have my eye on AMGN and GILD along
with maybe the index itself. But for now, just watching.”  I initiated AMGN and am also interested in GILD and IBB (I am not very tolerant of high volatility speculations in the smaller ones, so often dependent on clinical trial results).

This chart has a look of a Cup & Handle, with the Handle being broken to the upside.  If a would-be buyer is patient, maybe a test of the SMA 50 (293) or the EMA 20 (290) could be had.  But if the trade works out, a buy here at 295 would leave plenty of potential upside.


The weekly looks good above the EMAs 20 & 35, which have often been key support or resistance markers.  MACD is positive RSI is turning up.  The pattern would theoretically measure to around 350.


The monthly chart shows what could simply be an ill-fated recovery to test the breakdown after the mini crash from 400.  So is this an investment?  Folks, speaking personally, I don’t see this as an investment-worthy stock market.  So no, it is what could be a fruitful trade if it follows through to the upside.

ibb monthly

As for parameters, I am going to use 285 as a general limit (i.e. a mental ‘stop loss’).  That is the weekly EMA 35 and the monthly EMA 15.  But it could whipsaw to the daily SMA 200, which is at 282 and rising.  It could do that as a shake out and then reverse back upward.  Just trying to cover scenarios.

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.