IBB: Anatomy of a 'sell' signal Part II: 03/21/2013
IBB down 4.7% on Friday on heavy volume which may have been related to Op/Ex. Selling in biotech issues weighed heavily on the NNDX/QQQ's, which was also under pressure from SYMC's big drop, and then all that selling apparently spooked the rest of the markets. While this may just be a one day sell-off for the QQQ's and others, I don't believe this is the case for IBB.
IBB has two Fib A-B-C down structures in place. For the first, IBB is at the 138.2% level of 246 so I have chosen to use the larger A-B-C structure of Fib extension levels. The next Fib extension target of this larger structure is the 1:1 level at 239 and after that we have important support at 233 and then the 138.2% extension at 224.
The important level remains 233 as IBB has not taken out a previous swing point going back to November 2012. If IBB does not stop its decline at 233, then this would be new behavior and you can expect other swing lows to be taken out in time. If IBB does in fact take out the 138.2% target, then the next extension targets are: 161.2% at 215 & 261.8% at 200.
If you look at the chart, you can easily see that IBB is moving within the confines of what appears to be a bull flag. I didn't mark this because the chart is already too cluttered. The key to this pattern is the 233 level because should IBB drop below that, then the bull flag morphs into a falling price channel for however long it stays within that channel.
Until IBB ends its decline, it will put pressure on the QQQ's and IWM so IBB needs to be watched closely until it finally bottoms and reverses.
IMHO and subject to change without notice. GL
IBB has two Fib A-B-C down structures in place. For the first, IBB is at the 138.2% level of 246 so I have chosen to use the larger A-B-C structure of Fib extension levels. The next Fib extension target of this larger structure is the 1:1 level at 239 and after that we have important support at 233 and then the 138.2% extension at 224.
The important level remains 233 as IBB has not taken out a previous swing point going back to November 2012. If IBB does not stop its decline at 233, then this would be new behavior and you can expect other swing lows to be taken out in time. If IBB does in fact take out the 138.2% target, then the next extension targets are: 161.2% at 215 & 261.8% at 200.
If you look at the chart, you can easily see that IBB is moving within the confines of what appears to be a bull flag. I didn't mark this because the chart is already too cluttered. The key to this pattern is the 233 level because should IBB drop below that, then the bull flag morphs into a falling price channel for however long it stays within that channel.
Until IBB ends its decline, it will put pressure on the QQQ's and IWM so IBB needs to be watched closely until it finally bottoms and reverses.
IMHO and subject to change without notice. GL
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