OT Alert!!! This is about Biotechs. jmehta22!!
I hear you! Please look at this chart, it is the
NBI chart for all
Biotechs:
Attachment 258522
All biotech stocks are following this index, they have all broken down after having a wonderful rally for the past 4 1/2 months. This is not a company specific problem but an end of quarter reduction in holdings for Biotech in general. As you can see by the chart, RSI is near 30, or oversold, the uptrend line that kept us making easy money was broken leaving us with the problem of finding support. We found support at Monday's low of 2,440. We are developing a pennant formation as the month ends, and it is currently trading right on that feeble uptrend line. This is why all of the Biotechs are weak, none of them are going to rally until the index bottoms out. So watch this index as the NBI and major stocks are all trying to regain their 5-ema today. I see us bottoming out today and rallying tomorrow. Unfortunately this happens to every sector throughout the year. It is easy to throw a dart and buy a
Biotech when that major trend is pointing up. Today, you need to pull it together and buy when the prices are weak and the Index is bottoming out. This is why I don't buy Options, you can get caught in a situation where your great stock is part of a general sell-off and there is nothing you can do but wait it out.
In the past, everytime the NBI gets to RSI=30 it becomes the bottom for the next major rally so be patient and watch this index today. Forget about individual stocks as the large Funds are selling the basket right now .... but volume is weak and the large names are just sitting there waiting for the next leg up from here.
You will see
ACAD and
HALO put on a show as soon as it is clear to buy them again. All others will follow.
Look at
BBRY, it is following it's TA perfectly, it dips to the 200-dma, rallies and fails at the 50-dma and backs up toward the 200-dma and tries again. I have never seen
BBRY so relaxed as this prior to some big news.