Biotech Boom Or Bounce?
With the approval
of Biogen’s psoriasis drug, biotech stocks ignited late today. This news drove
the Biotech Holders
(
BBH |
Quote |
Chart |
News |
PowerRating) up over 7 points today to a high of 103.01
and closed around $102.00. Is this the start of a new boom in biotech or is
this just another countertrend bounce? I could speculate that because this drug
was approved that the market will view that as a positive for all biotech companies’ chances of getting drugs approved. But really…I don’t know. What I do know is
that BBH is facing key price and time parameters that will unlock the decision
of new uptrend or just a bounce.
The key Fibonacci
price resistance zone for BBH is from 102.78-106.15. This price zone includes
12 price levels. Along with price resistance, there are also timing parameters
to consider. Time analysis is pointing to May 23 to May 24 (+/- 1 day) for a
potential cycle high.
So, if BBH
fails to clear this price resistance zone, then the downtrend is still in place
and the recent rally would potentially present a short opportunity. On the flipside,
if BBH clears this same price zone then the bulls will likely take control and
we could be in for at least a higher corrective move to the upside or potentially
the start of a new uptrend. Regardless of the outcome, we have the time and price
parameters to make trading decisions against.
Â
Â
Â
Â
Â