Biotech Higher? Probably Not

Biotech could levitate on higher in the coming week but probabilities say no.

The chart (expandable version here) prints slowing upward energy since April, this year.  It’s clear that each upward thrust has produced less net gain.

2020-07-02_16-58-20-IBB-Weekly-5-bar-notes-BISThe first upward thrust from the end of March to late April, was a solid 28.7%.

After that it was 6.78%, then 2.31% and now last week, all the index could manage was 0.50%.

At this juncture, biotech appears exhausted

Anything can happen.  Price action can move higher in the coming week but it’s a low probability.

A quick internet search of ‘going short biotech’ turns up nothing recent except for this article from May, this year.

The chart of IBB shows the location of the linked article; Just towards the end of the first solid upward thrust.

That was then, this is now

Subsequent thrusts have lost energy.  It looks like we’re at an inflection point.

 

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.
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