Is The Biotech Space Looking For A Major Price Move?
Michele Schneider | Feb 09, 2022 12:01AM ET
The past four trading days have held roughly the same price areas within the major indices. Specifically, the S&P 500 (SPY) and the NASDAQ 100 (QQQ) have similar tight price action.
When watching for larger than average price moves, tight or consolidative price action can often lead to large range days.
Small range days can also be accompanied by lower amounts of volume which help to support a big move because when liquidity begins to dry up, it takes less buying or selling to move a symbol.
This is where it pays to watch for consecutive days with lower volume and tight price action when looking for a potential major price move.
With that said, one sector that is showing tighter price action along with lower volume is the Biotech ETF—iShares Biotechnology ETF (NASDAQ:IBB).
Looking at the above chart, IBB has traded within a small range of $129.09 to $132.77 in the past four trading days.
With a tight support area, we can watch for IBB to clear its mini range high and hold support from the 10-Day moving average at $130.10 and the recent low at $129.09.
However, while tight ranges can be easy to trade since they have obvious defined entry and risk areas, we must also be careful about large moves in the opposite direction.
A quick exit once key support is broken is the best plan when trading tight support and resistance areas.
h2 ETF Summary/h2- S&P 500 (SPY) 452.97 to clear as minor breakout point.
- Russell 2000 (IWM) 203.90 resistance.
- Dow (DIA) 355.01 the 50-DMA to clear.
- NASDAQ (QQQ) 362 resistance.
- KRE (Regional Banks) Watch to hold over 75.76.
- SMH (Semiconductors) 284 resistance. 270 to hold.
- IYT (Transportation) Looking to clear the 50-DMA next at 266.61.
- IBB (Biotechnology) 132.77 to clear.
- XRT (Retail) 83.14 resistance.
- Junk Bonds (JNK) Watch to fill the gap at 105.02. Still not giving a buying signal!
- SLV (Silver) 21.09 the 50-DMA support.
- USO (US Oil Fund) 61.36 support.
- TLT (iShares 20+ Year Bonds) Watching to find next support level.
- DBA (Agriculture) 20.37 support.
Get The News You Want
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.