Biotech Trading Channel

Breaking out after a month of congestion, biotech appears ready for a sustained move lower (not advice, not a recommendation).

As we’ll see below, price action’s been hugging the right-side channel line, posting congestion on the daily, for over eight weeks … until now.

Now, it’s pulling away to the downside.

Biotech SPBIO ($SPSIBI), Weekly

The ‘Week 1’, and ‘Week 13’, designations show the time between pivot-points; Fibonacci 13-weeks.

‘Normal’ market behavior is to come back and test the underside of congestion from the May – June, reversal of 2022 (green dashed line).

However, we all know at this point, it’s anything but normal in the markets or anywhere else.

Positioning

The short position in the sector, LABD-23-11, is active and has been documented here.

As a result of price action, the stop on LABD-23-11, is being moved up (from LABD 21.65) to the Leveraged Inverse Fund’s low of October 24th, LABD 25.66 (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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.

The Danger Point®, trade mark: No. 6,505,279