Don't Ignore This Chart!

This Biotech Bucked the Selling Pressure Last Week


Last week was tough on stocks as the S&P 500 SPDR declined around 1%, the Nasdaq 100 ETF fell 3% and the Biotech iShares plunged 4.5%. Despite a rough week, note that some 180 stocks in the S&P 500 closed higher and bucked the selling pressure. Many of these names came from the finance, utilities and healthcare sectors. Even though BioMarin (BMRN) is not part of the S&P 500, the stock closed higher last week and the price chart caught my eye.

The chart shows BMRN breaking resistance levels in May and June as the 50-day EMA crossed above the 200-day EMA. The stock hit a new high in early August and is clearly in an uptrend.

After a big advance from 76 to 106, the stock pulled back with a correction to the 96 area. A $30 advance and $10 pullback seems reasonable for a normal correction within a bigger uptrend.

There are now signs that this correction is ending as price broke above the mid September high and MACD turned positive, which means the 12-day EMA moved above the 26-day EMA. This recent uptrend signals an end to the correction and a resumption of the bigger uptrend. I, therefore, would expect a challenge to the August highs, and even a new high.

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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