Amgen’s the largest cap in the biotech sector ETF, IBB.
Loss of momentum (magenta arrow) is clear.
Upside energy (weekly) MACD has been dissipating for over a year.
So, this is no transient direction change. Zooming into the daily chart shows hesitation at the trend line.
Then last Friday, a significant move away from that trend.
When there’s a trend break, typically there’ll be a test of that break.
In this case, such a test would cause price action to move higher; testing the underside of the trend.
Because there’s been so much congestion at the trend line, we may not get the upside move.
It may have already self-tested. From here, price action could just make its way down to the measured move target ~ 164 – 165.
We’re short this market via LABD (not advice, not a recommendation) and have moved the stop to 18.17, based on yesterday’s action.
If AMGN decides to test the trend underside, it’s likely to stop out LABD.
If price continues to decline (unabated) to target levels, we’ll probably exit at pre-identified IBB, target ~ 138 – 140 (approx: 35 – 38, LABD).
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