Michele Schneider | Aug 22, 2023 05:51AM ET
Biotechnology stocks have traded basically sideways since the start of 2023.
In the face of higher rates, stronger US dollar, inflation, FDA approvals and busts, and an emerging winter season, the iShares Biotechnology ETF (NASDAQ:IBB) has a serenity to it that appears drug-induced if you will.
Of the top 10 holdings, Regeneron (NASDAQ:REGN) is the big winner as of right now, while Biogen is under pressure. Note-would keep your eyes on a potential bottoming pattern in BIIB.
Furthermore, and even more interesting, is that the ETF does not really reflect the big movers. Rather, IBB is holding as a result but not flying.
Is it time to buy IBB?
On the Daily chart, what is not shown here is the July 6-month calendar range low at 124.11.
Only once has IBB traded below that level in 2023 in March after the bank mini-crisis.
Hence, we feel good calling 124 the bottom of the trading range and risk point.
The top of the trading range of the July 6-month indicator is 130.50.
Again, IBB traded above that in early 2023, when it soared to 138.
However, since then, 130-132 has been resistance. We feel good calling that level the top of the trading range.
As far as other indicators, Real Motion looks like a double bottom from early July and now, although we would like to see more momentum.
On the weekly chart, we can say the same.
Our Leadership indicator shows IBB outperforming SPY on a daily timeframe but still underperforming on a weekly basis.
On the price, over 128 will pique our interest.
h2 ETF Summary/h2
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.