One of the noteworthy developments in recent days has been the move in biotech. The group has been on a tear after the late June selloff was met with a new wave of buying interest. The SPDR S&P Biotech ETF (XBI) rose 0.49 percent Thursday, bringing its YTD gains up to nearly 15 percent, outperformed the S&P by a wide margin. Now the question is whether the rally has more legs? Below is an update look at a trade in XBI.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – SPDR S&P Biotech ETF (weekly)
Our “U.S. Market Trading Map” painted XBI bars in green (buy) – see area ‘A’ in the chart. After a strong run of outperformance since early 2016, XBI peaked in late spring and rolled over. The March correction tested and respected support at the 23.6% Fibonacci retracement. The April rally pushed the ETF above the February-March highs, signified…Click here to read more.
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