Biotech (IBB) is now in position to move higher as a test of the trend break from Monday, the 19^th.

The chart shows IBB has retraced 68% of the move from the September 4^th low, to the October 14^th 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

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