November 5, 2009
Shares of Biotech HOLDRS (AMEX: BBH) have taken a heavy hit these past two weeks, but may have reached a short term support level.
After breaking to the downside from a pennant formation on October 21, shares of Biotech HOLDRS continued to fall until reaching a low of $88.89, some 15% from their rally high at $104.87 reached on July 30.
This low is a fraction above the critical 61.8% retracement support level at $87.95 for the March to July advance.
This is where Biotech HOLDRS would be expected to stop its declines and possibly to rally from.
However a decisive close below $87.95 would forecast a test of those same March lows, down at $77.50, so traders looking to profit from a bounce should maintain a buy stop under $87.95.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
Comments