After a year of lower prices for Biogen (BIIB), this week marks a nice rally that could signify the start of a changing trend. Biogen had a massive surge to $480 in the spring of 2015. In a great example of a tweezer top (two huge candles reversing each other), Biogen rolled over. In early July 2015, it sold off in a big way. The huge bar pushed it down below the 40 WMA expressed in this article title as the 200 DMA. 40 weeks x 5 days/week = 200 Daily Moving Average. The close on Friday marked the highest weekly close in 5 months as well as a push above the 40 WMA in lime green. The SCTR is improving, but it is still below 50.
The volume surge this week is really important. With the strong candle and the volume, this is nice to see. The PMO has a double bottom and has turned higher.
Early entrants can define their risk by using the 10 WMA at $278. With the recent push into biotech stocks, this looks like an interesting setup.
Good trading,
Greg Schnell, CMT, MFTA.
