Biotech Part II
Last week I was discussing
the fact that time and price parameters were lining up for a possible rally
in the Biotech HOLDRs (BBH). Well, after hitting $65, BBH has rallied almost
10 points from the last week’s swing low to today’s high. So, our Fibonacci
work continues to successfully warn us of upcoming moves.
So, now what? Well, remember,
I was not recommending to simply go out and buy BBH. In fact, the main trend
is down, so this rally is possibly presenting trading opportunities with the
trend. Today, as I looked at the 60 minute chart of BBH there were two points
of interest. First, a large price resistance zone and second
(
BBH |
Quote |
Chart |
News |
PowerRating) was forming
a two step corrective pattern into our price resistance zone. Sure enough, BBH
traded up into this resistance zone and has backed off. If this two step pattern
plays out and today’s swing high “sticks,” my objective for BBH in the coming
sessions is around 63.00-63.50. Before this objective is even a possibility,
BBH has to clear price support from 68.85-70.26.
If this price support zone
is violated to the downside, then there is a high likelihood of my objective
being hit. Otherwise, if this support zone holds and BBH makes a new high then
its back to the drawing board.
Stay tuned!
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