In today’s trading session, biotech IBB, was stretched to the extreme; coming within 0.30 points of making a new weekly high.
Doing so, would have negated the bearish (reversal) case that’s been presented on this site over the past six weeks.
Late in the session, price action began to erode and ultimately closed posting a reversal bar.
Even though IBB posted a reversal, the actual close was higher than yesterday’s.
That fact holds out the possibility of higher prices. It’s the way of the markets.
Who’s in control, bulls or bears, is always under contest.
If the next session moves lower and posts a new daily low, we’re at a pivot point; a trend change and potential for much lower prices.
A long term view of biotech shown here has the Relative Strength Indicator in a significant bearish divergence. From that perspective, biotech is out of fuel.