If there is one area to watch should the market have another run up, it is Biotechnology (IBB).
The channel lines that are perfectly parallel, going back to 2015. Since this is a weekly chart, what matters most is the weekly close. That means that, intraweek, we can consider price movements, but cannot consider a legitimate channel break up or down until the closing price on Friday.
Also interesting is that IBB made its all time highs in 2015 and has not traded up to that price since.
Fundamentally, IBB is strong, as a lot of the hope that the economy can return to normal depends on pharma to create a vaccine and drugs to help with symptoms. A weekly close over 128 area would be a good reason to believe new highs are imminent.
In the middle of the channel, I would expect a lot of chop. Note the moving averages at 111.14 and 106.12 - good midpoints to remember. And, although far away, a close below 92 would not be good at all!
Please watch my Business First interview from May 4th with Angela Miles (2-minute runtime):
- S&P 500 (SPY): 285 support with 300 big resistance
- Russell 2000 (IWM): 126 support to hold; over 130 better
- Dow (DIA): Since could not close over 240, looks vulnerable
- Nasdaq (QQQ): Failed at least week's highs; needs to hold around 215
- KRE (Regional Banks): 35 must hold - otherwise, do not think market will hold
- SMH (Semiconductors): 128-131.75 range near-term range
- IYT (Transportation): 143.64 has to clear. 140 support.
- IBB (Biotechnology): 128 has to clear
- XRT (Retail): 35.00 support, 37.50 resistance
- Volatility Index (VXX): 40.00 pivotal
- Junk Bonds (JNK): 97.70 resistance, 96.25 support
- LQD (iShs iBoxx High-Yield Bonds): 127.20 support
Director of Trading Research and Education