Biotech (IBB) is now in position to move higher as a test of the trend break from Monday, the 19th.
The chart shows IBB has retraced 68% of the move from the September 4th low, to the October 14th high.
That’s a deep pull-back and suggests weakness.
However, after a trend-line break, it’s typical market behavior to mount some kind of rally to test the break.
If that happens, part of the test could be a new high.
We already have a weekly MACD divergence (possible). If the test occurs soon enough, there could be a daily divergence as well.
Weekly and Daily bearish divergences. We’ll see.
Charts by StockCharts