There’s Something About Biotech
Until recently, the biotech group was one of the
strongest-performing groups in the Nasdaq. But on Tuesday, stocks
like Affymetrix
(
AFFX |
Quote |
Chart |
News |
PowerRating) down 25 5/16, Human Genome Sciences
(
HGSI |
Quote |
Chart |
News |
PowerRating) down
10 15/16, Medarex
(
MEDX |
Quote |
Chart |
News |
PowerRating) down 6 1/4, Abgenix
(
ABGX |
Quote |
Chart |
News |
PowerRating) down 5 13/16,
Incyte
(
INCY |
Quote |
Chart |
News |
PowerRating) down 5 3/4, and Celera
(
CRA |
Quote |
Chart |
News |
PowerRating) down 5 7/16, are drowning in
the proverbial sea of red.
If you had the mentality that, in spite of the good performance of the group
recently, it could all come to an end at any time, you’ve probably already
taken defensive measures and are benefiting from your tightened stops.
What’s ahead for biotechs from a technical standpoint? Let’s take a look at the
Biotech HLDRS
(
BBH |
Quote |
Chart |
News |
PowerRating) and see.
One of the things that any veteran chartist knows how to do is look at a chart and see possibilities that are shaping up. A possibility is
not a prediction, but just something to keep in mind. Last week, I saw a
potential head-and-shoulders pattern forming in the BBH, and I decided to keep it
in the back of my mind as the price action unfolded.
With Tuesday’s breakdown below the neckline, the BBH is now at
the front of my mind. If this breakdown holds into the close and the BBH
ends the session near its lows, we may see some more near-term follow-through to the
downside.
Until tomorrow,
Eddie
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